Yesterday, Ben Bernanke, chair of the president’s Council of Economic Advisers said he thought the hurricane would have short-run, but not long-run effects on the economy. He elaborated further today on some of the projected short-run impacts after he and other members of the president's economic team met with president Bush:
Bush Aide Bernanke Sees $3 Gallon Gas for 6-8 Weeks, Bloomberg: President George W. Bush's chief economic adviser said U.S. consumers are likely to pay $3 or more per gallon for gasoline for at least ``the next six to eight weeks'' as a result of damage caused by Hurricane Katrina. … Bernanke … also said jobs lost and disruption caused by Katrina will lower the third-quarter U.S. gross domestic product growth rate. He didn't say by how much. Bernanke, who briefed Bush on the hurricane's effect on the economy, noted that the oil futures market projects that gasoline prices will average $3.25 per gallon in September, with similar figures for October. ''Obviously, it is not a good thing to have gasoline prices that high; it will be a burden on consumers and businesses,'' Bernanke said in an interview. ''My view is that so long as the underlying infrastructure has not been permanently damaged, and the preliminary indications is that the refineries will come back online, the effects will be temporary.'' The president, after a lunch with Fed Chairman Alan Greenspan, was briefed by Bernanke and his economic team on a preliminary assessment of the economic impact of the hurricane. … Bernanke said the major topic of discussion in the economic advisers' hour-long briefing with Bush was the effect of the hurricane on gasoline prices. … ''The bottleneck we have is in refining capacity,'' Bernanke said. ''As refineries come back online, we will see prices fall, probably by November, to pre-hurricane levels.'' … Bernanke said that once cleanup and rebuilding efforts are under way, the Gulf Coast region should see job growth in building and trades industries that will help offset other jobs lost as a consequence of the hurricane. He did not predict how many jobs would be gained.