Harvey and Irma to slow U.S. economy but rebound should follow

With businesses disrupted, fuel and chemical refineries out of commission and consumers struggling to restore their lives, Hurricanes Harvey and Irma likely will pack a tough double-whammy for the U.S. economy.

Nearly one-fifth of the nation’s oil refining capacity has been shut down because of Harvey, and fuel production has dropped sharply as a result, according to Bank of America Merrill Lynch. Consumers also will spend less in the immediate aftermath of the storms. Even those ready to make purchases will face closed storefronts and dark restaurants.

Irma will cause tourists to delay – and in many cases never take – trips to Florida’s beaches or Disney World. Chemical refineries also have been closed, reducing the production of plastics.

Damage estimates from the two storms are still early, particularly for Irma. Hurricane Harvey likely will cost up to $108 billion, according to Bank of America Merrill Lynch, which would make it the second-most-expensive hurricane after Katrina.

Mark Zandi, chief economist for Moody’s Analytics, estimates Irma will cause $64 billion to $92 billion in damage.