10/15/2024
Florida reels from Hurricane Milton
Serious damage was being assessed after Hurricane Milton hit Florida Wednesday night, causing massive property destruction and flooding and leaving thousands without power before exiting the state as a post-tropical cyclone early Thursday. Government agencies reported the confirmed death toll at 12 as of Thursday afternoon, a figure expected to rise.
CoStar data ahead of Milton’s landfall showed more than 8 million square feet of commercial properties were in high-risk flood zones. In the wake of the earlier Hurricane Helene that has residents still recovering in 10 states, analysts said Hurricane Milton underscored further risks ahead for property owners across Florida.
“Florida, in particular, is already experiencing pockets of real estate weakness,” Selma Hepp, chief economist at data firm CoreLogic, said in a statement Thursday. “Rising insurance costs are a prominent concern for homeowners and potential buyers. Homeowners in any affected markets who didn’t have appropriate insurance damage coverage may be losing all of their hard- and long-earned home equity on which they relied for a financial buffer in times of economic hardship.”
Hepp said property investors across all types will also become more cautious about operating in markets that are perceived to be at increased risk of negative climate events, “which could further weaken an already struggling property market.” CoreLogic previously estimated damage from Hurricane Helene alone at between $30.5 billion and $47.5 billion, including insured and uninsured property losses.
TOPSHOT - Robert Haight looks around his destroyed house after it was hit by a reported tornado in Fort Myers, Florida, on October 9, 2024, as Hurricane Milton approaches. Florida residents fled or just hunkered down in the final hours October 9 before Milton pummels the state, as government emergency relief efforts were dragged to the center of the US election. (Photo by CHANDAN KHANNA / AFP) (Photo by CHANDAN KHANNA/AFP via Getty Images) (AFP via Getty Images)
Hurricane Milton could end up wrecking as many as 500,000 homes in Florida
Government agencies continued to survey Milton’s damage, including high winds ripping off much of the roof at the Tropicana Field baseball stadium in St. Petersburg. Media reports said a construction crane toppled from a high-rise office and condo building elsewhere in St. Petersburg, causing damage to an adjacent building as the storm first struck Florida's western coast.
Milton also spawned tornado damage in eastern Florida counties like Palm Beach, where there were reports of airborne dumpsters landing on rooftops and cars smashed against utility poles. Authorities said there were multiple deaths at a senior mobile home park to the north in Port St. Lucie, Florida.
Consumer inflation eases further
Consumer prices showed continued signs of slowing in September, though the 2.4% annual inflation rate was higher than some analysts anticipated. Shelter costs such as rents presented a lingering drag on households, even as overall inflation declined from August’s 2.5%.
The Labor Department reported shelter costs rose 4.9% from a year earlier, but numbers indicated slowing in that category’s month-over-month price growth at 0.2%. That was down from monthly growth of 0.4% in July and 0.5% in August.
“Rents are typically sticky, therefore this bodes well for the next couple of months,” Ryan Sweet, chief U.S. economist at research firm Oxford Economics, said in a statement Thursday.
The latest government data showed food costs rising 0.4% for the month and increasing 2.3% from a year earlier. Energy costs declined 1.9% for the month and dropped 6.8% from a year earlier, aided by a 15.3% annual decrease in gasoline prices.
Sweet said September’s overall inflation trends should help keep the Federal Reserve on a path of interest rate reductions to ensure a soft landing for the economy, with Oxford Economics anticipating a quarter-point cut at the Fed’s next rate-setting meeting scheduled for Nov. 6-7.
September’s rate brought annual inflation closer to the Fed’s previous target of 2%, and the annual rate is now well below the peak 9.1% of June 2022.
Boeing strike, storms raise jobless claims
Initial U.S. claims for unemployment insurance rose by a higher-than-expected 33,000 from the prior week and reached 258,000 for the week ended Oct. 5, as some analysts cited factors including fallout from East Coast hurricanes and the ongoing strike at Boeing production facilities in the Northwest.
“Claims rose markedly in some of the states most impacted by Hurricane Helene and the Boeing strike, although some unimpacted states saw large increases as well,” Nancy Vanden Houten, lead U.S. economist at research firm Oxford Economics, said in a statement Thursday.
Claims will likely continue to be elevated in states affected by Helene, Hurricane Milton and the Boeing strike until it is resolved, Vanden Houten said, noting Boeing-related claims have been particularly elevated recently in Washington state.
About 33,000 members of the International Association of Machinists and Aerospace Workers remained on strike Thursday at Boeing facilities near Seattle and Portland, Oregon, in a walkout that has now spanned nearly a month after pay negotiations broke down earlier this week. Ratings agency S&P estimated the strike is costing the aircraft maker $1 billion per month.
The latest Labor Department numbers showed initial claims at their highest level since early August 2023 and posting above the general weekly range of 200,000 to 250,000 for the past year, remaining low by historical standards. Continued claims in all programs, tracked on a more delayed basis, totaled about 1.64 million for the week ended Sept. 21, rising 14,701 from the prior week and also up from 1.61 million in the comparable week of 2023.
