Cost of East Coast snowstorm on the small side — about $3 billion

Cost of East Coast snowstorm on the small side — about $3 billion
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The East Coast snowstorm that buried Washington and New York over the weekend hit the retail and hospitality sectors the hardest but the economic costs were relatively low, according to an economic analysis released on Monday.

The clean up from Winter Storm Jonas will cost the economy between $2.5 billion to $3 billion, according to estimates from Ryan Sweet and Adam Kamins, two Moody's Analytics economists.

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If the snow had fallen during the week, Moody's estimates that the costs would have tripled. 

The storm dumped between 2 and 3 feet of snow in the span of 36 hours, paralyzing the region and affecting tens of millions of people.

Overall, the storm will cost retailers about $860 million, Moody's estimates.

Restaurants will be the big losers, too, because they won't be able to make up those lost sales. 

This estimate is for the lost output that won’t be recouped through overtime, working from home and deferred spending.

So the economic costs were driven higher because some states and cities were either completely or partially shut down on Friday and Monday.

Federal offices in Washington, D.C., are closed Monday.

"While federal government spending will simply be postponed, the biggest cost is from lost work hours and compensation for federal employees, which the national product accounts treat as government output," the economists said.

"Unlike government spending on goods and services, all the loss in hours worked will not be made up in subsequent weeks."

Transportation is another loser. 

Transit systems were completely or partially shut down in Washington, Baltimore, Philadelphia and New York, and these lost sales won’t be recouped.

The Metro in Washington offered limited service on Monday and is providing free-of-charge rail service.  

Airlines reportedly canceled 12,235 flights during the blizzard over the weekend.

But the economists noted that the absence of prolonged closures or damage at major seaports and airports helped minimize the overall effects.

Each industry will fare differently, and numerous assumptions were made. For example, the storm probably postponed consumer spending or shifted it from stores to online, Sweet and Kamins said. 

The economic cost was determined by using state-, metropolitan- and county-level daily output per working and weekend day by industry in the areas affected by the storm.

It does not include any costs from infrastructure damage. 

Because each place was affected differently, and were separated into those that were severely, moderately and least affected.