Ida: Economists expect only slight storm hit to US economy

Economists say the impact of Hurricane Ida on the U.S. economy should be modest as long as damage estimates do not rise sharply and refinery shutdowns are not prolonged

WASHINGTON -- The impact of Hurricane Ida on the U.S. economy should be modest as long as damage estimates do not rise sharply and refinery shutdowns are not prolonged, economists said Sunday. Mark Zandi, chief economist at Moody’s Analytics, said because of disruptions from Ida, he may trim his forecast for growth in the current third quarter by a few tenths of a percentage point but will add that loss back by boosting his estimate for fourth quarter growth to reflect rebuilding from the storm damage. Zandi said he expects GDP to grow 6.5% in the second half of this year, matching the average growth seen in the first six months. He said in addition to Ida the other downside risk to the forecast is the delta variant of the coronavirus, which has caused daily cases to spike in recent weeks in many parts of the country. “The key channel for Ida to impact the broader economy is through energy prices,” Zandi said. “We will have to see how much damaged occurred to production in the Gulf and how long that production will stay off line.”