Hurricane Joaquin likely to cost U.S. economy billions

Tropical Storm Joaquin this morning became Category 1 Hurricane Joaquin, hitting sustained winds of 75 m.p.h and abruptly waking the country up from what had been a sleepy hurricane season.

And the storm promises to be a doozy, even if never makes landfall. Forecasters say it could dump as much as 10 inches of rain over wide swathes of the country from the Southeast to New England, and is threatening to cost the U.S. economy billions. Adding to the worries, Joaquin could converge with another slow-moving storm in on the East Coast and lead to devastating flooding into next week.

This is one of the “most alarming rainfall forecasts I have ever seen,” says Mike Smith, a senior vice president of Accuweather Enterprise Solutions, the forecaster’s business-to-business arm that advises companies on how to cope with severe weather.

Courtesy of Accuweather

“There is going to be serious catastrophic flooding from North Carolina to Massachusetts,” Smith told Fortune. “This is going to disrupt the economy regardless of [whether] Hurricane Joaquin makes landfall,” the meteorologist said.

While this storm is particularly unpredictable, Smith expects the economic impact to reach into the billions of dollars, regardless, from damaged property, to disruption in manufacturing (especially for those with just-in-time production), the shipping companies like Fedex (FDX) having trouble making deliveries, to canceled flights, to people not going to the restaurant this weekend.

The economy impact will of course depend on how populated an area Joaquin hits if it reaches land. (There could even be flooding in New York City if the storm goes inland in the Mid-Atlantic and creates coastal flooding.) But all told, the storm has the potential to be as devastating as Sandy (the second costliest hurricane in U.S. history.) because of the quantity amount of water and the size of the area that will be hit.

Still, some companies could benefit, provided the storm doesn’t disrupt travel and traffic too much. The storm should bring in cool weather, so if it turns out not to be as destructive as feared, it could help apparel sales as warm weather had made many shoppers delay buying new fall clothing, said Evan Gold, senior vice president of client services at Planalytics and a former Macy’s (M) executive. And the biggest winners are likely to be stores like Home Depot (HD) and Lowe’s. (LOW)

But let’s hope the storm proves to be a bust – we don’t need another Sandy anytime soon.