Hurricane Sandy’s economic impacts tough to gauge

Hurricane Sandy was a massive natural disaster that exacted a high human toll.

It also impacted the national economy. In the short run, it certainly did considerable damage — sales were disrupted, stores forced to close, employees laid off, deliveries halted.

There was an immediate spike in unemployment insurance claims because of the storm.

In the latest release, we saw a week-over-week decline in initial unemployment claims of 25,000 to 370,000, but the 4-week moving average still went up because today’s report replaced a pre-Sandy report that was much lower. The 4-week average is 408,000.

Calculated Risk has been blogging regularly about Sandy’s effects and does so again today:

This sharp increase in the 4 week average is due to Hurricane Sandy as claims increased significantly in NY, NJ and other impacted areas over the 4-week period (some of those areas saw another decline this week). Note the spike in 2005 was related to hurricane Katrina – we are seeing a similar impact, although on a smaller scale.

Note how we can see a pretty extreme spike in late 2005 related to Hurricane Katrina on CR’s graph:

Now, what does this mean for the release on Friday (tomorrow) of the payroll jobs numbers and unemployment rate in November?

The consensus forecast is for 80,000 jobs created, but it’s really hard to guess how the numbers will look.

We could see much lower job growth for November — or it could be that the worst effects of Sandy had already been handled by payroll employers by mid-month. ADP estimates that the private sector added 118,000 jobs in November, but their data have not tracked well with numbers from the Bureau of Labor Statistics.

We could also be seeing some slight impact on the jobs data because of the “fiscal cliff” negotiations. And we might have seen some slight impact last month because of the election results.

I’m guessing that the numbers will show job growth above consensus, but it’s really just a roll of the dice at this point.