Sandy hit to US economy to be 'very modest'

Superstorm Sandy could mean higher gas prices and a slower economy in coming months, though reconstruction will help cushion the economic blow.

The storm will end up causing about $20 billion in damages and an additional $10 billion to $30 billion in lost business activity, according to IHS Global Insight, a forecasting firm. That could subtract about 0.6 percentage point from U.S. economic growth in the October-December quarter, the firm says.

Some forecasters are more optimistic. Paul Ashworth of Capital Economics says the overall hit to the economy will likely be "very modest."

The storm cut power to 7 million homes, shut down 70 percent of East Coast oil refineries and inflicted worse-than-expected damage in the New York metro area. That area produces about 10 per cent of U.S. economic output.