CBO: Katrina could cause loss of 400,000 jobs

Manufacturing News, Source : TheManufacturer.com
Published : 07 Sep 2005 20:27

Hurricane Katrina could directly cost the United States 400,000 jobs or more, the Congressional Budget Office (CBO) announced today in a report to Congress.

The hurricane could cause real gross domestic product growth in the second half of 2005 to decline by up to one full percentage point.

The main areas likely to experience prolonged disruption of economic activity and employment are the New Orleans-Metairie-Kenner metropolitan statistical area (MSA) of Louisiana and the Gulfport-Biloxi and Pascagoula MSAs of Mississippi, said the report. “Other areas were affected by the storm but are likely to experience little if any sustained disruption of activity,” the report continued.

But employment will turn around in the long run, the report added. “Employment will increase in subsequent months, as workers return home and businesses reopen and as reconstruction activity gathers steam,” the report said. “The large-scale relocation will generate additional demand for workers in receiving communities; some of those jobs will be filled by the evacuees themselves.”

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