- Premios y alfombra roja
- Terra TV
A recent string of weak economic data suggests the recovery may take a much bigger hit from superstorm Sandy than first thought, but economists have yet to abandon hopes for a quick rebound.
Data covering retail sales, industrial production and first-time applications for unemployment benefits have shown unexpected weakness, raising concerns among analysts that they might have underestimated the damage from the storm.
"We still don't have enough numbers, but if you look at (jobless) claims and the industrial production numbers, it's certainly a much bigger impact on economic activity than what people are currently anticipating," said Millan Mulraine, senior macro strategist at TD Securities in New York.
For now, many economists are sticking to their forecast of between a 0.2 and 0.5 percentage point dent to fourth-quarter gross domestic product, but they see risks of a bigger bite -- especially after the weak industrial production report.
Data distortions caused by the storm, which lashed the densely populated East Coast in the last few days of October, are making it hard to get a good feel of the economy's pulse.
The turbulence comes at a time when the recovery is already being restrained by worries of sharp cuts in government spending and higher taxes next year, known as the fiscal cliff.
The storm pushed up new claims for state jobless aid early this month by the most since Hurricane Katrina in 2005.
It also chased would-be buyers out of automobile showrooms, putting a brake on automobile purchases and depressing overall retail sales -- one of the key measures of economic activity.
On Friday, the Federal Reserve said the monster storm knocked nearly a percentage point off industrial output last month, catching economists off guard.
Given the extensive damage, economists said it was almost certain to have a profound negative effect on November's industrial production data as well.
All else being equal, such an outcome would lead economists to revise already low projections for fourth-quarter GDP lower. However, forecasters look to see if there are rebounds in other areas, like retail sales and construction, to offset the drag.
According to a Reuters survey of economists published on Thursday, fourth-quarter growth is seen at an annual pace of 1.6 percent, down from 1.8 percent in an October poll. The economy is expected to grow at a similarly subdued 1.5 percent rate in the first three months of 2013.
RISING ECONOMIC COST
"It's safe to say the economic cost of Sandy is rising (but) there are still a number of question marks," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania.
He said the main question was how much of the rebuilding would take place in the fourth quarter and how much would get pushed into early next year. In the end, economists largely agree the negative impact on the economy will be temporary.
New York Governor Andrew Cuomo estimated the storm caused $50 billion in damage and economic losses in his state. Neighboring state New Jersey suffered the worst damage in the storm.
Economists at BNP Paribas in New York, who forecast the damage at $75 billion to $100 billion for the East Coast, shaved their fourth-quarter GDP growth estimate to a 1.0 percent annual pace from 1.2 percent to take into account the hit from the storm.
They see a 0.75 percentage point boost to GDP over the next year or two as the East Coast rebuilds.
What is clear is that economic data is unlikely to provide a clear picture of the economy's underlying health for weeks.
Retail sales, which fell in October for the first time in three months, could bounce back in November as some people start replacing autos and other property damaged during the storm.
However, with some shops in the Northeast still closed early this month, further sales declines cannot be ruled out. In addition, uncertainty over how much discounting retailers are prepared to offer this coming Friday, the traditional start of the holiday-shopping season, will also muddy the signal from the data.
The storm likely affected homebuilding in October, but the impact on national statistics could be marginal as the Northeast accounts for only about 10 percent of overall housing starts. The government releases October housing starts data on Tuesday.
Initial jobless claims are probably already falling from the 1-1/2 year high scaled in the week ended November 10.
Data covering last week, to be released on Wednesday, could offer clues on whether the storm is likely to skew the main U.S. measure of employment for November, given that it covers the week in which the government was surveying employers.
Carl Riccadonna, a senior U.S. economist at Deutsche Bank in New York, believes the storm will stunt payrolls growth this month, citing what happened with Hurricane Katrina seven years ago, when the economy created 127,000 fewer jobs during the month the powerful storm struck than the month before.
"In the current environment, the experience from Katrina points to an extremely soft November jobs report, and the latest jobless claims data corroborate this," said Riccadonna.
Deutsche Bank forecasts November payrolls increasing only 25,000 and expects the unemployment rate to rise a tenth of a percentage point to 8.0 percent. Nonfarm payrolls grew 171,000 in October.
But some economists disagree and instead expect a boost to payrolls.
"If you did not hire in the first week of November, you can hire in the second or third week," said TD Securities' Mulraine. "You would think there would be increased hiring for construction workers, clean-up crews and all those things."
(Editing by Andrea Ricci)