Leading Wall Street analysts argue that Hurricane Milton, which bears down once a century, can cause more than $50 billion in material damage, under a scenario that can be conditionally characterized as moderate, but in the case of a more negative configuration of the situation associated with a natural disaster, the mentioned indicator may grow to the $175 billion mark.
The specified likely consequences may be in addition to the carnage provoked by Hurricane Helen. Against the background of the relevant situation, the United States may face a record number of wreckage.
Jefferies equity analyst Yaron Kinar and others said in a note that it is too early to form any estimates of insurance losses, but it can already be assumed that the consequences of a major hurricane in one of the most densely populated regions of Florida may cause losses that will be expressed in monetary terms in mid-double-digit billion dollars. They also underlined that some estimates suggest that a hurricane that bears down once 100 years could provoke $175 billion in damage in the Tampa region and $70 billion in the Fort Myers region.
So far, it is difficult to accurately determine the extent of losses. The corresponding figure will depend on timing and location, with a landfall closer to Fort Myers being less costly.
In this case, it is worth mentioning that two years ago, when Hurricane Ian, which is a category 4 storm, hit the Fort Myers area, losses of more than $50 billion were recorded. Ian bears down once in 20 years.
Yaron Kinar stated that if Milton takes the path through the more developed Tampa region, the potential losses could be greater.
Milton currently belongs to the above-mentioned category 4. At the same time, the hurricane may weaken by the time its full force is felt.
Wells Fargo experts said that the market currently seems to be forecasting losses of more than $50 billion. Analysts of this financial institution assume the probability of damage in the range of $10 billion to $100 billion.
It’s worth mentioning that the destructive force of Hurricane Helen swept through Florida almost two weeks ago. Moody’s experts on Tuesday, October 8, estimated the damage from this natural disaster at $11 billion. It is also expected that the National Flood Insurance Program will likely see losses approaching $2 billion. Moody’s experts have not yet estimated the potential damage from Milton. Mohsen Rahnama, chief risk modeling officer at this company, said that Helen is by far the most impactful event of the current hurricane season, although the situation may change quickly due to Milton, which will hit Florida in the coming days.
Moody’s experts also drew attention to the fact that many in the regions worst affected by Helen do not have flood insurance. This means that most of the damage will not be insured. Also, in this case, the economic loss of property will significantly exceed the insured losses. The corresponding statement was made by Firas Saleh, the firm’s director of US inland flood models.
Milton weakened slightly on Tuesday. At the same time, the wind continued to blow at 145 mph. Milton is expected to hit Tampa on Wednesday morning, October 9, and cause storm surges of 10 to 15 feet in Tampa Bay. The region will face significant danger. Large-scale damage is also expected in this case. It is worth noting that, according to preliminary forecasts, Milton is not such a significant source of danger for the adjoining countries as Helen.
Also, the possibility that the mentioned hurricane will become a factor in declining overall economic performance in the United States is not excluded. At the same time, such a scenario, in the case of its implementation, will be a source of short-term impact on the entire economic system of the country in the statistical dimension. The transformation of this impulse into a kind of generator of long-term adjustment of economic information is extremely unlikely. Milton may have a short-term impact on the data on the labor market and consumer spending. Also, a hurricane could potentially cause food prices to rise. Moreover, it is obvious that the consequences of a natural disaster, the scale of which is not known for certain, will become a deterrent to the prospects for economic growth in the affected regions.
Andrew Hollenhorst, chief economist at Citi, said the October jobs report is likely to be significantly affected. In this case, a kind of statistical consequence of Milton is implied. The expert’s assumption is based on the fact that the reference period under review by the US Bureau of Labor Statistics for the monthly jobs report is the pay period that includes the 12th of the month.
It is worth noting that in addition to rising food prices, a hurricane can also provoke a similar dynamic cost of energy. In this context, it is appropriate to mention that last Monday, October 7, Chevron announced the evacuation of all personnel from its Blind Faith platform and shut down the facility. Production figures at the company’s other oil rigs in the Gulf of Mexico remain at normal levels.
Returning to the topic of the potential increase in food prices due to the hurricane, it is worth noting that the cost of fruits is at risk. Milton can provoke an increase in the corresponding indicator. Florida accounts for 17% of the total citrus production in the United States.
Joel Myers, AccuWeather’s founder and executive chairman, predicts that price increases for some vegetables and fruits, such as oranges and tomatoes, will be seen in grocery stores in a couple of weeks. According to the expert, Milton could become one of the most damaging and costly hurricanes in the United States.
As we have reported earlier, AI’s Race for US Energy Intensifies.
