How Hurricane Harvey Will Ripple Through the U.S. Economy
Economists in The Wall Street Journal’s monthly survey see hit to GDP and jobs in third quarter, followed by slow rebuild
Hurricane Harvey will distort measures of the U.S. economy in weeks and months ahead. Everything from jobless claims, which already surged in a report on Thursday, to gross domestic product and inflation, will be knocked off course by the storm.
The storm will make it difficult for economists to gauge the trajectory of the economy, with brief spikes across a wide range of reports. It will be hard to discern whether bad reports result from storm damage and then whether good reports owe to the effects of rebuilding. It could be well into 2018 before the storm’s effects have fully washed out of the economic data.
.. They expect the storm to reduce the pace of job gains by about 27,000 jobs a month in the third quarter on average, followed by little change in the fourth quarter and then a boost of 13,000 in the first quarter 2018, as many people find work in the rebuilding process.
..The growth rate of gross domestic product will fall by about 0.3 percentage points in the third quarter, they expect, followed by no effect on the fourth quarter, and an 0.2 percentage point boost in the first quarter of 2018.
..In the longer run, the storm is expected to have no lasting impact, with forecasts for gross domestic product, unemployment, inflation and other major economic indicators unchanged for 2018 overall,