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Storm's economic damage less than feared

Estimates put Irene's overall toll so far at up to $7 billion, with Atlantic City casinos and Broadway among those feeling the pain.

August 28, 2011|By Richard Verrier, Los Angeles Times
  • The Wall Street bronze Bull looks out to an empty Broadway in Lower Manhattan, New York, early as Hurricane Irene hits the city and Tri State area with rain and high winds. New York City resembled a ghost town after 370,000 people were told to evacuate flood-prone areas, including near Wall Street and at Coney Island, and mass transport was shut down.
The Wall Street bronze Bull looks out to an empty Broadway in Lower Manhattan,… (Stan Honda / Getty Images )

Irene shut down Broadway, took a bite out of Hollywood's box office, closed casinos in New Jersey and canceled thousands of East Coast flights. But the economic fallout had been predicted to be far worse.

The full cost of the storm, which caused widespread flooding and has so far resulted in at least 22 deaths, was still uncertain as insurance experts began tallying the estimated damage Sunday.

Overall, the storm, which was downgraded from a hurricane to a tropical depression Sunday, could cost insurers $1.5 billion to $3 billion to cover claims for damaged homes, vehicles and businesses, said Jose Miranda, director of client advocacy at Eqecat Inc., a catastrophic risk management firm in Oakland. Total damage, including uninsured losses, could range from $5 billion to $7 billion, he said.

PHOTOS: In the path of the storm

That's relatively good news. The Northridge earthquake in 1994 cost insurers $40 billion to $50 billion in property damage. Hurricane Katrina reportedly cost more than $70 billion in insured losses alone.

"We haven't gotten all the data yet [on Irene], but I think the damage is much less severe than had been feared and the economic impact will, therefore, be a lot smaller than people predicted," said Mark Zandi, chief economist at research firm Moody's Analytics.

On Sunday, New York Mayor Michael R. Bloomberg lifted the city's evacuation order, and the New York Stock Exchange and Nasdaq OMX Group issued statements saying they planned to be open Monday.

The last time weather shut down U.S. equities markets for an entire day was on Sept. 27, 1985, as a result of Hurricane Gloria. Officials and Wall Street analysts, however, warned that it was not clear how much trading activity there would be. One key problem: People getting to work, as the city begins to resume its public transportation systems.

Atlantic City, which reportedly had been banking on this weekend to be one of the year's best turnouts by gamblers, shut down its casinos before the storm's arrival. The gambling halls are expected to reopen by Monday.

About 1,000 movie theaters shut down over the weekend as a result of the storm, which studio executives blamed in part for a nearly 25% decline in ticket sales over the weekend, compared with a year earlier.

Broadway felt similar box-office pains. The Broadway League had shut down all Broadway shows Saturday and Sunday. A spokeswoman for the league said she expected performances to resume a normal schedule beginning Monday.

There was, still, the glimmer of an economic bright spot amid all the dark news. Zandi noted that rebuilding efforts in North Carolina, Pennsylvania, New Jersey and elsewhere could give a short-term boost to construction workers and other industries in the coming months.

PHOTOS: In the path of the storm

richard.verrier@latimes.com

Times staff writers Steve Zeitchik and Amy Kaufman contributed to this report.

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