Hurricane Florence won’t just leave fallen trees and flooded streets in its wake.
According to a report from the J.P. Morgan Chase Institute, extreme weather events like the one battering the Carolinas and Virginia can have far-reaching effects on consumers’ wallets, impacting their spending for months after the storm has cleared.
The think tank tracked 1 million checking accounts belonging to households in Houston and Miami following Hurricanes Harvey and Irma, and found significant changes to the levels of funds coming in as well as out. During the week of landfall (which in Florence’s case began early Friday morning on the North Carolina coast), inflows to the accounts dropped by over 20 percent, or approximately $400 on average. Spending, meanwhile, fell more than 30 percent, or around $500 that week, and more than 65 percent on the day of landfall as businesses closed up shop and residents took shelter from the storm.
Interestingly, these outflows were still lagging 12 weeks later, when most shops had reopened and locals had returned to work. Debt payments toward things like credit cards and student loans also remained well below the baseline after dropping in the weeks leading up to the hurricanes, suggesting that people may have needed to cut corners on their typical expenditures in order to cover the costs of home and auto repair.
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In aggregate, this can have serious repercussions for businesses that aren’t dedicated to fixing up cars and clearing water damage: According to one estimate, retailers suffered $1 billion in negative impacts from Hurricane Harvey and nearly $2.8 billion from Hurricane Irma, including damage to stores and warehouses, as well as lost sales.
More than 10 million people throughout North and South Carolina and Virginia are under a hurricane or tropical storm watch or warning as of Friday, according to the National Weather Service.
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