Hurricane Harvey

Dallas Fed: Texas Economy Will Withstand Impact From Harvey

Unemployment claims spiked after the storm, but long-term impact should be limited.

Before Harvey hit, the Texas economy saw solid job growth and low unemployment. Immediately after the storm, the number of unemployment claims increased nearly five times.

That's similar to the time after Hurricane Ike, when there were more claims for about five weeks, Laila Assanie, senior business economist at the Federal Reserve Bank of Dallas, said.

"Given that the magnitude of the disruption caused by Harvey was larger than Ike, the expectation is that claims will likely remain elevated for a similar or longer period," she said.

At the same time, post-Harvey demand is expected to make the labor shortage in construction worse.

Estimated damage costs from the storm range from $85 billion to $108 billion, making it one of the costliest U.S. hurricanes of all time.

But Assanie said the long-term effect on the state's economy should be limited. The Fed forecasts that September job numbers will fall sharply but rebound in October – December for the Texas Gulf Coast.

"Houston will rebound because of its importance as the energy capital of the U.S. and as a center for business and trade," Assanie said.

Other affected parts of the Gulf Coast will gradually recover as well, she said.

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Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters, the Houston Press Club, National Association of Real Estate Editors, and Public Radio...

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