Katrina Could Have Long-Lasting Effect on the Economy

By Rex Nutting, MarketWatch

Hurricanes and other natural disasters rarely have a large and long-lasting effect on the economy, but Katrina could be an exception.

While most storms have only a regional impact, Katrina could be the rare beast that has national or even international consequences.

“There is a real sense of foreboding about the economy now that Katrina has struck with full force,” said Bernard Baumohl, executive director of Economic Outlook Group. “The Louisiana and Mississippi Gulf region represent the soft underbelly of the U.S. energy industry.”

Katrina took aim at a vulnerable chokepoint for U.S. energy markets. The region not only produces a large percentage of domestic oil and gas, it is also a transportation hub for both imported and domestic production.

And much of the petroleum that Americans use is refined at facilities along the ravaged Gulf coast.

For this complete story, please visit Assessing Katrina’s long-term impact.