Puerto Rico recently observed the one-year anniversary of Hurricane Maria—the most destructive storm to hit the Commonwealth since the San Felipe Segundo hurricane in 1928. Maria, combined with Hurricane Irma, which had glanced the island about two weeks prior, is estimated to have caused nearly 3,000 deaths and tens of billions of dollars of physical damage Millions went without power for weeks, in most cases months. Basic services—water, sewage, telecommunications, medical care, schools—suffered massive disruptions. While it is difficult to assign a cost to all the suffering endured by Puerto Rico’s population, we can now at least get a better read on the economic effect of the storms. In this blog post, we look at a few key economic indicators to gauge the negative effects of the storms and the extent of the subsequent rebound—not only for the Commonwealth as a whole, but for its various geographic areas and industry sectors. We also examine data from the New York Fed Consumer Credit Panel to assess how well households held up financially and what effects the home mortgage foreclosure and payment moratoria had.
In the nine months that have passed since Hurricanes Irma and Maria ravaged the Caribbean, much interest has been focused on Puerto Rico and its roughly 3.3 million American citizens, who weathered the largest blackout in U.S. history. However, far less attention has been paid to the U.S. Virgin Islands, even though St. Thomas, St. Croix, St. John, and a number of smaller islands suffered comparable devastation. This is partly attributable to their much smaller population: the U.S. Virgin Islands (“Virgin Islands”) is home to roughly 105,000 people—1/30th Puerto Rico’s population. Even so, this territory is also part of the United States and the New York Fed’s district. In this post, we examine roughly six months of economic and related data on the Virgin Islands’ economy to better ascertain the extent of disruption and subsequent recovery from the devastation of Hurricanes Irma and Maria.
An examination of the fallout from Hurricanes Irma and Maria on the economies of Puerto Rico and the U.S. Virgin Islands was the focus of an economic press briefing today at the New York Fed. Both U.S. territories were suffering from significant economic downturns and fiscal stress well before the storms hit in September 2017, raising concerns about their paths to recovery.
Just two weeks after most of Puerto Rico dodged the proverbial bullet, missing the brunt of Hurricane Irma, the island was devastated by Maria—one of the ten strongest Atlantic hurricanes on record. Making landfall on September 20, 2017, the storm caused not only massive physical destruction and tragic loss of life but also widespread and persistent power outages, shortages of potable (and even nonpotable) running water, and disruptions to telecommunications and travel, among other issues. With the storm boosting costs and disrupting activity, the short-term economic impact is clearly significant. But an even greater concern is that the adverse short-term effects of the storm, overlaid on an already shrinking economy, may evolve into long-term adverse effects. In this post, we focus on the magnitude, duration, breadth and nature of the economic disruptions, as measured mostly by employment.