Economy Matters

Adrienne Slack, the Atlanta Fed's regional executive in our New Orleans Branch, has personally experienced the impact of a natural disaster. Adrienne lost her home during Hurricane Katrina in 2005 and was displaced for more than a year. In her role as regional executive, Adrienne discusses economic conditions with business and community leaders throughout South and Central Louisiana as well as southern Alabama and Mississippi and the Florida panhandle.

Mike Chriszt: What is your initial take on the impact of the recent flooding in Louisiana?

Adrienne Slack: Well, it's the worst natural disaster since Hurricane Gustav in 2008. Thirteen people lost their lives. Over 30,000 people were evacuated during the flooding, and over 109,000 homes throughout the affected area (see map) are estimated to have damage. Many homeowners in the affected areas didn't have flood insurance. As a result, we are concerned that they may be forced to make a decision as to whether they will even attempt to rebuild because they can't afford a loan to repair their home. Early estimates of the total cost of the floods are over $8 billion.

MC: Do you anticipate any long-term impact on employment in the affected region?

AS: Many thousands of small businesses in 22 parishes were damaged in the floods. We've seen initial claims for unemployment insurance spike to their highest levels since the Deepwater Horizon oil spill in September 2010. Continuing claims for unemployment insurance have risen and remain elevated, indicating that there will likely be some longer-term impact on employment levels. Some government reports indicate that 278,500 Louisiana residents were unable to work because of reasons ranging from temporary closures and suspended operations to transportation impasses and residential flooding. This is important because unemployment has risen in Louisiana as a result of the downturn in the energy sector. In the industrial/refining sector, two-thirds of the workforce was affected. The floods have made a difficult situation worse for many Louisianans.

MC: Has there been any damage to the physical infrastructure, especially in the energy sector?

AS: Repairs to roads, rail, and some bridges are under way, but the major highways in the area are open. The area's massive industrial infrastructure weathered the floods relatively unscathed. All indications are that the energy infrastructure weathered the storm well. This is very important because Louisiana is a hub for much of the nation's chemical production, refineries, and pipelines. Any significant damage to these facilities would have likely resulted in a spike in energy prices across the country.