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Hurricane Katrina-hit USA may suffer for years . . .
Hurricane Katrina's shadow may hang for years over the economies
of Louisiana and Mississippi, with worries intensifying the
states may not see the fast jobs and business bouncebacks common
after U.S. natural disasters.
Louisiana and Mississippi have slowly growing populations with
relatively low levels of income and education. Both poor states
on the Gulf of Mexico are reliant on energy, leisure, ports,
agriculture and manufacturing for jobs and tax revenues.
Together with Alabama, the third Gulf state struck by Katrina's
fierce winds, rain and flooding on Monday, the states account
for only 3.1 percent of U.S. output while holding out-sized
importance in the domestic energy and transport sectors.
Federal disaster declarations covered flooded New Orleans and a
total of 90,000 square miles along the U.S. Gulf Coast, an area
roughly the size of Britain. As many as 400,000 people had been
forced from their homes.
Economic losses from the storm and the flooding could total more
than $100 billion, economic modeling firm Risk Management
Solutions said on Friday.
"It will take longer for Louisiana and Mississippi to recover
from the storm than Florida last year," said Mark Vitner, senior
economist at Wachovia Corp. "Resource- and agriculture-reliant
areas just don't do as well."
Florida, which had a relatively light encounter with Katrina
last week, was struck in 2004 by four major hurricanes that
caused about $45 billion in damage to homes, businesses and
public facilities.
But Florida, with a steadily-growing population, one of the
lowest jobless rates in the country and robust leisure and
housing sectors, reported only short-lived losses of business,
wages and taxes before entering a rebuilding boom that is still
underway.
Similarly quick economic revivals, including extensive
rebuilding and repairs fueled by insurance and federal
government payments, occurred after earthquakes in San Francisco
in 1989 and in Los Angeles in 1994.
But Vitner said eastern North Carolina counties heavily reliant
on agriculture that were struck by hurricanes in 1999 actually
lost residents after the storms and endured significantly higher
unemployment levels which are only ending now.
"In a place like West Palm Beach (Florida), which is all tourism
and retirement, the business structure is stronger," said Robert
Dye, senior economist at Economy.com in West Chester,
Pennsylvania. "In New Orleans, we are not going to be looking at
the typical post-hurricane bounceback."
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