“Jobless Claims in U.S. Jumped Last Week After Sandy” (Bloomberg): Unemployment benefit applications jumped from 78,000 to 439,000 after Sandy. This is a result of both the physical inability of people to file claims during the storm and also a repercussion of the storm itself. Forecasters were anywhere between 300,000 to 450,000 and claim there are several other factors affecting the rise in filings, but the main cause is the storm and its electricity outages.
However, as a previous post claimed, “While pushing up claims, the storm may bolster homebuilders and other housing repair companies. Sandy’s damage could spur a sales boost similar to the one provided by Hurricane Irene, which added about $360 million in sales last year.”
But with $20 billion in damage, “The number of people continuing to collect jobless benefits climbed by 171,000 to 3.33 million in the week ended Nov. 3, the most in more than four years.” Bernanke and the Fed choose to keep interest rates at close to 0, reported in their October meeting released yesterday.
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I am not surprised that initially jobless claims rose after the storm. This makes sense due to the inability of people to get to work and taking into account the destruction of many small businesses in coastal areas.
Over a longer time period, I still expect the storm to boost employment as coastal areas begin to rebuild. My parents (from Long Island) are reporting monthly waits to find a contractor to repair homes on Long Island. Perhaps this initial shortage could lead to a future construction bubble across coastal areas of the Northeast.
A speaker in my Japan class doesn’t yet have information on his house (Ortley Beach NJ) because contractors aren’t yet allowed in the area, sinkholes and natural gas leaks and unstable debris. Anyone tied to that area is surely hunkering down, trying to save every penny.
At a more abstract level, this is an empirical question on the magnitude of the local multiplier. The loss in wealth is real; are people saving more to rebuild? If so, that diminishes the multiplier. In other words, while carpenters may be doing OK, that may not be enough to offset slower sales at the local store….
Tracking county-level employment would be interesting, and probably sobering. In general, though, can’t get monthly data, not enough households sampled to provide statiscally meaningful information, outside of select metropolitan areas. But we will be able to get quarterly or semi-annual data. Let’s hope that’s too low in frequency to catch anything, that adjustments are largely complete by late spring 2013.
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