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Key Takeaways
- About 2.8% of the U.S. Gross Domestic Product lies in the path of Hurricane Milton, one estimate showed.
- The analysis showed that while it is difficult to calculate, Milton could have a measurable impact on GDP.
- Atlanta Fed President Raphael Bostic said he was monitoring the economic impact of recent storms in his district and warned that increased insurance costs from weather disasters were becoming a “big problem.”
As Florida prepares for the devastation of another powerful storm, Hurricane Milton's economic consequences could be felt throughout the U.S. economy.
The Category 3 storm is expected to make landfall in central Florida late Wednesday evening. According to an analysis from Oxford Economics, approximately 2.8% of the U.S. Gross Domestic Product (GDP) is in Milton's path. Parts of Florida and its southeast neighbors are still recovering from damages caused by Hurricane Helene nearly two weeks ago.
The damage from the powerful hurricane could be a drag on fourth-quarter GDP, though the true economic impact of storm damage can be difficult to estimate, Oxford analysts said. An estimate from Jeffries anticipated tens of billions of dollars in property damage and lost business from the storm.
“The economic costs of Milton are highly uncertain, and hopefully, the storm isn’t as bad as feared,” wrote Ryan Sweet, chief economist at Oxford Economics.
This Fed Official Is Keeping An Eye on the Hurricane
Atlanta Federal Reserve Bank President Raphael Bostic said at an event Tuesday that he was monitoring the economic ramifications of Hurricanes Helene and Milton. The Federal Reserve Bank of Atlanta district includes Florida, Georgia, and parts of Tennessee, Louisiana, and Mississippi.
“I’m hopeful that Milton does not inflict the same sort of carnage that Helene did,” Bostic said of the storms. “Those also have significant implications on how the economy is going to perform, and these things are out of the Federal Reserve's hand. What we have to do is make sure we're ready.”
Already, the economic consequences of Hurricane Helene are expected to reduce October employment numbers by 40,000 to 50,000, and Milton will likely add to those totals, the Oxford Economics report said.
Bostic said the economic effects of the hurricanes could persist for six months or more and the Federal Reserve will need to formulate an appropriate policy strategy to respond.