The Wall Street Journal's Real Time Economics blog quotes recent analysis from J.P. Morgan Chase in its post, Oil Spill May End Up Lifting GDP Slightly.
" 'The spill clearly implies a lot of economic hardship in some locations, but given what we know today, the magnitude of these setbacks looks dwarfed by the scale of the US macroeconomy,’ said chief U.S. economist Michael Feroli. If anything, he added, U.S. GDP could gain slightly from it….
"Commercial fishing in the Gulf is also likely to suffer, but that's only about 0.005% of U.S. GDP. The impact on tourism is the hardest to measure, although it's fair to expect that many hotel workers who lose their jobs will find it hard to get new ones. Still, cleaning up the spill will likely be enough to slightly offset the negative impact of all this on GDP, J.P. Morgan said. The bank cites estimates of 4,000 unemployed people hired for the cleanup efforts, which some reports have said could be worth between $3 and $6 billion."
Another point brought up by several analysts is that the size of the U.S. economy requires that a disaster would have to be massive to have an impact on national economic performance. Earthquakes, hurricanes (including Katrina), and other disasters simply did not have a significant impact on short-term national economic growth.
Smartly, the Real Time Economics post also notes that the J.P. Morgan commentary points out that:
"[G]ross domestic product measures are often not a good guide to an economy's well being."
It is also important to note that this story continues to unfold. We simply do not know what the long-term implications of the oil spill will be or what potential changes in the regulatory environment could have on future energy extraction—not only in the Gulf but also nationally.
Analysts will continue to strive to put a number tag on the oil spill, both in terms of the impact on the macroeconomy and in terms of the regional economic impact. The truth of the matter is that what we do know is still far less than what we don't know.
By Michael Chriszt, an assistant vice president in the Atlanta Fed’s research department