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What Are the Facts About Sandy's Damage and Economic Impact?

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Hurricane Sandy (Photo Credit: Getty Images)
Question: What Are the Facts About Sandy's Damage and Economic Impact?
Answer: Superstorm Sandy hit the Eastern seaboard just in time for Halloween 2012. Even before hitting land, Sandy was the largest tropical storm in the Atlantic, reaching 900 miles in diameter. This monster was dubbed Frankenstorm by the National Weather Service because it combined an end-of-season Category 1 hurricane with a cold front and a second storm, turning torrential rain into snow. This system, combined with the 150-mph winds of the jet stream, pushed the monster north toward Pennsylvania and New York State.

The storm was pushed into the U.S. by a third weather pattern known as the North Atlantic Oscillation. As it hit shore, it picked up more moisture from the Gulf Stream. To make matters even worse, Superstorm Sandy made landfall just in time for the full moon, making storm surges even higher than normal.

Although technically not a hurricane, Sandy was a once-in-a-lifetime storm event, putting 50 million people at risk. So far, 95 people have sadly died as a result of the storm.

Sandy is expected to do $18-$20 billion in property damage, according to Connecticut Analysis Corporation. Nevertheless, the overall economic impact could be as high as $50 billion, due to massive power outages, transportation disruptions and business closures. (Source:CNN, Sandy's Trail of Devastation, October 30, 2012; Bloomberg, What You Need to Know About Sandy, October 29, 2012

Sandy closed the NYSE, the first time in 27 years since Hurricane Gloria. Even the electronic exchanges, based in New Jersey, were closed so as not to endanger the workers there. The exchanges were also closed on Tuesday, the first two-day closure due to weather since 1888. Exchange officials hope to open with at least a skeletal crew on Wednesday to prevent further economic chaos. That's because it's the last day of the month, which is when businesses close their books.

Flooding and Winds Impact

The storm surge hit a 600-mile stretch of the Eastern Seaboard. Lower Manhattan's Battery Park was hit by 14-foot waves, beating Hurricane Donna's 10.02-foot record set in September 1960. More than 80% of Atlantic City was underwater, and some of the Boardwalk was swept away.

All five Great Lakes were warned of gale force winds as the storm headed their way on Tuesday. Waves 20 to 25 feet are possible on the south side of Lake Michigan.

Winds reached a high of 80 mph when Sandy made landfall. That's when Sandy was downgraded from a hurricane to a post-tropical storm. However, winds will be felt as far west as the Great Lakes and into Canada.

Power Outages

Sandy hit power stations hard. More than 8 million people were without power, as stations flooded and trees fell on power lines.

Con Ed said it received the worst damage to its system ever, leaving 780,000 people without power. This included many hospitals. NYU Langone and Coney Island were evacuated. Lower Manhattan was completely dark. Officials said full power might not be returned for a week, as they were still assessing the damage. Repairmen were literally pumping water out of the electrical tunnels.

New York State requested 4,000 utility workers from as far away as California. At least 90% of Long Island was without power, affecting 800,000 people.

Transportation Grounded

  • More than 15,000 flights into New York and other East Coast airports were cancelled. As of Tuesday morning, all three New York airports were closed.
  • New York subways were flooded with seawater and remained closed as of Tuesday morning. This was the worst damage in its 108-year history. All trains had already been moved to yards, and were not damaged.
  • MTA bus systems were shut down. Limited bus service might be restored Tuesday afternoon, and 100% reactivated by Wednesday.
  • AMTRAK was closed.
  • Bridges and roadways were closed in Manhattan. East River bridges were open as of Tuesday morning. Cab drivers were allowed to pick up more than one passenger.

Blizzard Impact

As the storm hit the cold front, rain turned to snow, bringing blizzard conditions and dropping 2-3 feet of snow on West Virginia. Some areas of southwestern Virgina and Kentucky received two feet, while the Appalachians in North Carolina and Tennessee could receive 12 to 18 inches as the storm moves through on Tuesday. (Sources: ABC News, Hurricane Sandy Put 50 Million People at Risk, October 29, 2012; Bloomberg, Sandy May Push Record Surge Into Manhattan, October 29, 2012; CNBC broadcast)

Property Damage

There were more than 20 fires in the greater New York area, on Monday night. The largest was a six-alarm fire in Queens, more than 80 homes were destroyed despite the efforts of more than 200 firefighters who braved the hurricane to put out the fire. (Source: CNBC)

Impact on Gas and Oil Prices

Gas price futures actually dropped after the storm, despite the closure of some refineries. Oil prices initially fell, since there will temporarily be less demand from closed refineries. (Source: CNBC TV; Bloomberg, Oil Slides Gasoline Gains as Sandy Nears U.S., October 29, 2012)

How Does Sandy Compare to Other Big Storms?

Sandy was not the worst storm in U.S. history. That dubious distinction is taken by a Category 3 storm known as Hurricane Katrina. It cost the economy more than $125 billion, delivered $81 billion in property damage, and left 1,836 people dead. However, most of Katrina's damage was due to flooding in New Orleans. Katrina had been a Category 5 when it was still out to sea.

Sandy was easily worse than 2011's Hurricane Irene. This was a Category 2 storm when it hit North Carolina on August 26, 2011. It had lost a lot of power as it traveled over land toward New York and Boston, so many people only experienced a bad storm. Nevertheless, Irene killed at least 20 people, and left 4.5 million people without power, and storm surges in Manhattan were 9 feet high. Property damage was $20 billion, while economic impact was $45 billion.

Sandy was also less than the second most expensive hurricane, Andrew, which was a Category 5 storm that hit Florida in 1995. It destroyed $55 billion in property, with a 16.9 foot storm tide (the sum of the storm surge and astronomical tide) into Biscayne Bay, a record for the southeast Florida peninsula. Irene's property damage is a little less than #3, Hurricane Ike, which was a Category 4 at its peak, and calmed down to a Category 2 when it hit Texas. Even so, it cost the U.S. economy $24.9 billion in 2008.

The Category 3 storm Hurricane Wilma was the fourth largest, doing $21 billion in damage. It pummeled Florida in 2005 with winds as high as 120 miles per hour. Hurricane Ivan was fifth, with $19.8 billion in property damage.

However, Sandy is expected to do more damage than Hurricane Gustav, which hit Louisiana two weeks before Hurricane Ike. Gustav cost $10 billion. It had been a Category 4 at its peak, but calmed down to a Category 2 by landfall.

If everyone follows warnings to evacuate, Sandy could do less human damage than past hurricanes. In October 1954, Hurricane Hazel killed 95 Americans and 81 Canadians. It was a Category 4 hurricane. In June 1972, Hurricane Agnes killed 129 people and caused $1.7 billion in damage ($13 billion in today’s dollars). Even though it was only a tropical storm, it caused severe railroad damage.(Source: Fox News Insider, "Economist: Financial Hit From Hurricane Irene Could Top $45 Billion," August 29, 2001; NPR Nightly Business Report, "Hurricane Irene's Economic Impact," August 24, 2011) Article updated November 2, 2012

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