This week Houston has been rocked by Hurricane Harvey. It has been a tragedy, displacing people from their homes and leaving people wounded or dead. First off, if you would like to donate to the effort you can click here.
Most people understand that a hurricane can effect an individual's life and their personal finances. They may need to file insurance claims and spend money to rebuild their house. But what most people don't know is how natural disasters effect the economy. Here are two key ways that Hurricane Harvey will affect the economy:
When a natural disaster hits it may leave businesses destroyed. Therefore, a lot of the members of the community will find themselves without work. Not only do people need to rebuild their personal possessions but they need to find new jobs or help their current business rebuild as well. Unemployment rates will usually rise in the areas affected by disasters.
In Texas, specifically, a lot of oil refineries will have to stop work temporarily or until repairs are made. Therefore, there is a lot of crude oil but none of it can be converted to gasoline. This has caused oil prices to drop and the price of gas to increase. There is low demand for crude oil but high demand for gas. This could truly negatively effect the US economy.
Stay Safe Houston. I hope everyone has a great Labor Day Weekend!