The Macroeconomic Effects of Hurricane Katrina

Publication Date: September 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Economics

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Abstract:

Hurricane Katrina will have substantial and long-term effects on the economies of southern Louisiana and Mississippi. But, given that those two states account for just 2% of total U.S. gross domestic product, the effects on the national economy will be much less dramatic than the effects on the region. Since the storm, a number of economic forecasters have adjusted their predictions to reflect its effects. Most indicate that, as a result of the storm, national economic growth is expected to be 0.5%-1.0% slower than in the second half of 2005. However, as economic activity recovers in the affected region, and rebuilding begins, growth in the first half of 2006 is now expected to be more rapid than was previously forecast. This report will be updated as reliable data become available.