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1 [1] (October 2, 2017)

handle is hein.crs/crsmthmbcsc0001 and id is 1 raw text is: CRS INSIGHT Economic Impact of Hurricanes Harvey and Irma October 2, 2017 (IN10793) Related Author Jeffrey M. Stupak, Analyst in Macroeconomic Policy (jstupakcrsLocgov, 7-2344) In recent weeks, multiple southern states and U.S. territories have experienced significant property damage and loss of life as a result of severe hurricanes, including Harvey, Irma, and Maria. This Insight will focus on the economic impact of Hurricanes Harvey and Irma, as the impact of Hurricane Maria is still unfolding in Puerto Rico. Hurricane Harvey first made landfall in Texas on August 25 as a category 4 storm, before stalling for a number of days above south and southeast Texas delivering torrential downpours. Hurricane Irma made landfall in the Florida Keys as a category 4 storm on September 10 after sweeping through the Caribbean, impacting multiple other countries and U.S. territories. A combination of strong winds and widespread flooding, resulting from strong rains and storm surges, have disrupted large communities in the South and South East and resulted in widespread property damage. Damage to property often gets significant media attention following a hurricane, but it is not the only impact on economic activity. Property damage affects the overall capital stock, which is used in the production of goods and services, but does not itself factor into gross domestic product (GDP), as GDP is a measure of the flow of goods and services produced. Severe storms often dampen economic activity in the short term by disrupting the consumption and production of goods and services. Severe weather impacts the consumption of goods because of limited mobility and availability of these goods during the event. Advance figures from the Cenus Bur= show that retail sales decreased by 0.2% in August, after rising 0.3% in the previous month. Severe weather can also impact the production of goods and services by damaging machinery, disrupting the local labor supply, and disrupting national supply chains. In the medium term, severe storms often result in a rebound in economic activity as rebuilding begins and businesses resume production that may erase any loss in economic output resulting from the storm. After a major disaster, there are numerous government programs that distribute aid to those affected. Additionally, many individuals and businesses begin to receive insurance payments in the months following natural disasters. The spending of government aid and insurance payments can result in a significant boost to economic activity. For a number of reasons, the negative impacts of Hurricanes Harvey and Irma on economic activity are likely to be larger than average due to the amount of damage to property, the duration of the storms, the populous nature of the areas affected, and the concentration of energy industries in the area affected, particularly with respect to Harvey. Hurricanes H~n~ and Im~a are estimated to have each caused between $42.5 billion to $65 billion in property damage, amounting to between 0.2%-0.3% of GDP, making these storms among the m rie a r n r in the post- WWII period. While property damage is not explicitly factored into economic output (GDP), more damage is generally

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