THANKS, KATRINA:

Hurricane to Cost U.S. 400,000 Jobs, Study Says: The GDP will take a hit this year, but rebuilding may lift the economy in 2006, the report finds. (Jesus Sanchez, September 8, 2005, LA Times)

An estimated 400,000 Americans will lose their jobs and the nation's economy will grow more slowly during the second half of this year as a result of the economic fallout from Hurricane Katrina, according to a federal report released Wednesday.

But the long-term economic effect of the deadly storm that devastated New Orleans and the coast of Louisiana, Mississippi and Alabama will be relatively muted, and rebuilding activity should give the economy a boost, the Congressional Budget Office said.

"While Katrina has devastated ordinary business, it will also likely lead to a boom in clearing and reconstruction activity," the report said. [...]

Despite the dire projections, the report said the U.S. economy was strong and large enough to absorb Katrina's hit without much pain in the long run. The rebuilding of destroyed and damaged homes, businesses, and commercial and government facilities will pump billions into the economy and create jobs, the study said.

"Economic growth and employment are likely to rebound during the first half of 2006 as rebuilding accelerates," the report said.

Just in time for the midterm elections....

Posted by Orrin Judd at September 8, 2005 10:47 AM