The fires consuming the forests of California and Oregon and darkening the skies over San Francisco and Portland are also damaging a regional economy already singed by the coronavirus outbreak.
Wildfires are destroying property, running up huge losses for property insurers and putting a strain on economic activity along the West Coast that could linger for a year or more.
The credit rating agency A.M. Best estimates that insured losses from the blazes in California could top the unprecedented $13 billion recorded in 2017 when the state was hit by three of the five costliest fires in U.S. history.
“We know that the damage is widespread, but we don’t really know how many homes, how many structures have been destroyed," said Adam Kamins, an economist who tracks natural disasters for Moody’s Analytics. "I imagine the number is going to be an unbearably high one.’’
The fires are unlikely to make much of a dent in the overall $20 trillion U.S. economy. The financial fallout will be measured in the low billions of dollars, not in hundreds of billions or trillions. To make a nationwide impact, Kamins said, it would take something like Hurricane Katrina in 2005, which disrupted oil supplies.
But the economic pain will be intense in areas decimated by fire, especially poor towns in rural Oregon and California, piling on at a time when many businesses have already succumbed to the pandemic-induced recession. U.S. economic activity collapsed at a record 31.7% annual pace from April through June. The virus and the steps meant to contain it have thrown millions of Americans out of work.
Fire wiped out much of the small community of Phoenix, in southern Oregon, including downtown businesses like La Tapatia, a Mexican restaurant opened in 1992.
“Good places like our own La Tapatia, but so many other family run businesses, (were) destroyed by the massive fire,” its owners informed patrons in a Facebook post, adding there was “lots to do” but they hoped to some day reopen.