Harvey, Irma to slow U.S. economy but rebound should follow

WASHINGTON » With businesses disrupted, fuel and chemical refineries out of commission and consumers struggling to restore their lives, Hurricanes Harvey and Irma will likely pack a tough double-whammy for the U.S. economy.

Nearly one-fifth of the nation’s oil refining capacity has been shut down because of Harvey, and fuel production has dropped sharply as a result, according to Bank of America Merrill Lynch. Consumers will also spend less in the immediate aftermath of the storms. Even those ready to make purchases will face closed storefronts and dark restaurants.

Irma will cause tourists to delay — and in many cases never take — trips to Florida’s beaches or Disney World. Chemical refineries have also been closed, reducing the production of plastics.

Damage estimates from the two storms are still early, particularly for Irma. Hurricane Harvey will likely cost up to $108 billion, according to Bank of America Merrill Lynch, which would make it the second-most-expensive hurricane after Katrina.

Mark Zandi, chief economist

for Moody’s Analytics, estimates that Irma will cause $64 billion to $92 billion in

damage.

While the economic toll pales beside the human costs, analysts estimate that the nation’s annualized growth rate will be one-half to one full percentage point slower in the July-September

quarter than it would otherwise have been.

But repair work, reconstruction and purchases of replacement cars and other goods should provide an offsetting boost later this year and in early 2018.