The country’s tepid economic growth is being dealt a fresh setback in the form of a massive nor’easter pounding the Mid-Atlantic and Northeast on Tuesday.
The accompanying disruptions from the winter storm could slice up to 0.2 percentage points off the country’s first-quarter GDP growth, according to a new Oxford Economics estimate out Monday. Currently, the firm pegs first-quarter GDP growth at a meager 1.1 percent.
As it churns up the East Coast, Stella hit the densely populated Washington-to-Boston corridor and disrupted transportation, work schedules and school although the impact in major cities so far has not been as bad as initially feared. The storm contributed to the cancellations of more than 7,746 flights, disrupted travel for more than 400,000 travelers, according to FlightAware data. Multiple states have declared states of emergency.
Potential hits to GDP growth will depend on how severely business activity is disrupted. Some of the losses, such as a missed lunch at a restaurant, will be permanent, while others, such as buying milk at the grocery store, will merely be pushed forward.
“Importantly though, while some of the activity will be lost permanently, some of the losses will be offset by ex-ante ‘preparation’ sales as well as clean-up activity,” Oxford Economics wrote in the note.
Just in New York City, the comptroller’s office said on Monday that snow removal costs could hit $23.9 million to $35.9 million.
Importantly too, technology will help lessen the blow of potential lost economic activity.
“[S]ince many service sector workers now have the capability of working remotely from home, this should further lessen the ‘observable’ GDP growth impact,” the economists wrote.