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Hurricanes & Tropical Cyclones

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Hurricanes, a type of tropical cyclone, are powerful storms that can cause extensive damage (especially in developed coastal areas) because of strong winds, storm surge flooding, and heavy rainfall. NOAA issues forecasts and warnings when storms appear and conducts research to better understand and predict the lifespan of hurricanes and how people receive, understand, and respond to hurricane forecasts and warnings.

NOAA’s Role: 

NOAA’s National Hurricane Center (NHC) is responsible for issuing forecasts and U.S. watches/warnings for tropical cyclones. NHC has a long history of issuing advisories for tropical cyclones, with the first known recorded forecast being in 1954, when 24-hour predictions of a storm’s track were made. Since then forecasts have expanded out to 7 days and now include predictions of intensity, size, and associated hazards, such as wind, storm surge, and rainfall.  The lead times and accuracy of tropical storm and hurricane watches and warnings have increased to give the public additional time to prepare for these potentially devastating events.

Through investments in research, there has been a steady reduction in the track and intensity forecast errors over time. Since the Hurricane Forecast Improvement Program’s inception in 2007, model hurricane track errors were reduced by 50%, intensity forecast errors were reduced by 56%, and intensity errors during rapidly intensifying storms were reduced by 47%.

NOAA also plays an important role in conducting research in behavior science and communications to understand how to best design products and communicate forecasts, watches, and warnings for people to best understand what action to take.  

Why it Matters:

Exposure of the U.S. Population

A greater number of people reside in coastal areas and are at risk of being impacted by hurricanes:

In an effort to improve hurricane forecasts, NOAA launched the Hurricane Forecast Improvement Project (HFIP) in 2007 with the goals of improving forecasts of storm track and wind speeds. Understanding how the public values forecasts helps guide resource allocation for further research and adaptive actions:

    • Since the creation of the HFIP, hurricane wind speed forecast errors have been declining by 0.21 m/s or 3% annually, leading to a nearly 50% decline in wind speed errors by 2020. These historical improvements in forecasting reduced costs (fatalities and damages to property and crops) by 19% or $5 billion (2019$) per hurricane on average. The value of these improvements exceed the annual budget for all federal weather forecasting and far exceeds the approximately $25 million annual budget for HFIP. – Molina, R., & Rudik, I. (2024). The social value of hurricane forecasts (w32548). National Bureau of Economic Research. https://ssrn.com/abstract=4859400
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    • A study focused on regions impacted by both Hurricanes Florence and Michael found that the public residing in affected areas was willing to pay, on an annual basis, $60 million, $67 million, and $50 million (2018$) for improvements (+/- 20% of the rate experienced between 2008 and 2018) in storm track, wind speed, and precipitation forecast, respectively.  – Molina, R., Letson, D., McNoldy, B., Mozumder, P., & Varkony, M. (2021). Striving for Improvement: The Perceived Value of Improving Hurricane Forecast Accuracy. Bulletin of the American Meteorological Society, 102(7), E1408-E1423. https://doi.org/https://doi.org/10.1175/BAMS-D-20-0179.1
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    • A study of the effect of 12-hour-ahead forecasts on hurricane damages in the U.S. found that larger errors in the storm’s predicted landfall location led to higher damages. It estimated that the cumulative reduction in damages from hurricane forecast improvements since 1970 has been about $82 billion (2017$). This exceeds the U.S. government’s spending on these forecasts and the affected public’s willingness to pay for them. – Martinez, A. B. (2020). Forecast Accuracy Matters for Hurricane Damage. Econometrics, 8(2), 18. https://doi.org/10.3390/econometrics8020018 

Preparing for the impact of a hurricane can lead to costly evacuations:

  • In a case study, authors analyzed the evacuation decisions of Texas residents affected by Hurricane Ike (2008). The study found that the average evacuation cost for an individual was $227 (2023$) (including the expenditure on transportation, food, and lodging), and the total expenditures for coastal communities in Texas ranged from approximately $61 million (with a predicted 197,798 evacuees under voluntary evacuation orders) to $77 million (with a predicted 249,913 evacuees under mandatory evacuation orders). – Jiang, F., Meng, S. S., Khan, M., Halim, N., & Mozumder, P. (2023). Estimating willingness to pay and costs associated with hurricane evacuation. Transportation Research Part D-Transport and Environment, 121, Article 103826. https://doi.org/10.1016/j.trd.2023.103826

Tropical cyclones that impact U.S. military bases can result in costly damages to assets. These damages can be mitigated through preparation that use tropical cyclone forecast information:

  • To mitigate damages from hurricane events the Department of Defense defines tropical cyclone conditions of readiness (TCCOR). TCCOR are a set of preparedness levels that are adhered to by military bases in preparation of an approaching tropical cyclone. In a case study focusing on the Navy Base, Norfolk Naval Station in Virginia, the economic value of reductions in damages to assets when preparing using a skilled (i.e., incorporating tropical cyclone forecast data) TCCOR level II readiness condition was estimated to yield an average of $25 million (2022$) in savings per tropical cyclone. – Gulati, S., & Sampson, C. R. (2022). Economic value of tropical cyclone conditions of readiness (vol 108, pg 1687, 2021). Natural Hazards, 112(1), 1013-1014. https://doi.org/10.1007/s11069-022-05209-x 
Hurricanes and tropical storms have caused significant damage since the early 1900s and the magnitude of these damages has increased in recent years:
  • Tropical cyclones caused $2.65 trillion (2018$) in damages from 1900-2022 with the 20 most damaging tropical cyclones (half of which struck the U.S. in the past 25 years) being responsible for over 60% of these losses. – Willoughby, H. E., Hernandez, J. I., & Pinnock, A. (2024). Trends in US Atlantic Tropical Cyclone Damage, 1900-2022. Journal of Applied Meteorology and Climatology, 63(12), 1499-1510. https://doi.org/10.1175/JAMC-D-24-0047.1 

  • If the 50 most costly hurricanes were to occur again in 2022, they would cause $2.9 trillion in damages (2022$), adjusting for inflation, population, and regional wealth – Muller, J., Mooney, K., Bowen, S. G., Klotzbach, P. J., Martin, T., Philp, T. J., Bhatt, D., Dixon, R. S., & Girimurugan, S. B. (2025). Normalized Hurricane Damage in the United States: 1900-2022. Bulletin of the American Meteorological Society, 106(1). https://doi.org/10.1175/BAMS-D-23-0280.s1 
Impacts to Property Hurricanes and tropical storms impact property through wind damage, flooding, and storm surge. A select accounting of property damages includes:
  • Flood-related damage from Hurricane Irma (2017) in Florida was found to affect approximately 70,000 buildings (industrial, commercial, government, and residential). Additionally, within Duval, Lake and Palm Beach counties, residential structures were found to have the largest exposure to flooding with estimates ranging from $300 million to $2 billion (2017$) at risk per county. – Miller, A. J., Arias, M. E., & Alvarez, S. (2021). Built environment and agricultural value at risk from Hurricane Irma flooding in Florida (USA). Natural Hazards, 109(2), 1327-1348. https://doi.org/10.1007/s11069-021-04880-w

  • Simulations based on historical data from 97 hurricanes that made landfall between 1940-2007 showed that the expected value of hurricanes’ impacts on property in North Carolina coastal counties was $3,166 million (2021$). The expected capital losses within the residential, commercial, and industrial sectors amounted to $2,321 million, $490 million, and $188 million, respectively. – Liu, D. H., Li, J. K., Wing, I. S., Blanton, B., Kruse, J., Nozick, L., & Millea, M. (2024). Unequal economic consequences of coastal hazards: hurricane impacts on North Carolina. Environmental Research Letters, 19(10), Article 104003. https://doi.org/10.1088/1748-9326/ad6d81 
  • In eastern North Carolina, Hurricane Florence (2018) generated $366 million (2018$) in observed insured damages and an estimated $1.77 billion in combined uninsured damages and property value losses. Furthermore, property owners, lenders, and local governments were exposed to an additional $321 million, $137 million, and $103 million in potential losses respectively due to increased rates of mortgage default and abandonment.  – Thomson, H., Zeff, H. B., Kleiman, R., Sebastian, A., & Characklis, G. W. (2023). Systemic Financial Risk Arising From Residential Flood Losses. Earths Future, 11(4), Article e2022EF003206. https://doi.org/10.1029/2022EF003206 
Impacts to Labor
  • Hurricanes reduce labor earnings in most fields other than construction. Figures from recent case studies quantifying the impact include:
    • After a hurricane hits Puerto Rico, based on simulations using wind speed and track data between 1995-2019, average employment falls by about 0.5% over a six-month period. – Barattieri, A., Borda, P., Brugnoli, A., Pelli, M., & Tschopp, J. (2023). The short-run, dynamic employment effects of natural disasters: New insights from Puerto Rico. Ecological Economics, 205, Article 107693. https://doi.org/10.1016/j.ecolecon.2022.107693
  • After Hurricanes Katrina and Rita, individuals experiencing major residential damage had an average quarterly earnings loss of $1,710 while those with minor damage had a loss of $631 (2005$). Large earnings losses were found for individuals employed in health care (9.3%) and in leisure and accommodations (8.5%). Those in construction experienced an earnings gain, both in the short-term (4.8%) and long-term, six to seven years after the storms (22.7%).  – Groen, J. A., Kutzbach, M. J., & Polivka, A. E. (2020). Storms and Jobs: The Effect of Hurricanes on Individuals’ Employment and Earnings over the Long Term. JOURNAL OF LABOR ECONOMICS, 38(3), 653-685. https://doi.org/10.1086/706055 
Impacts to Firms
  • Extreme weather events, particularly hurricanes, influence firm-level uncertainty and stock market dynamics: 
    • Implied stock price volatility increases up to 22% when hurricane-level wind speed probabilities reach at least 50%. Firms with all establishments within 50 miles of landfall see volatility rise by about 18%. The total market-implied cost of post-hurricane uncertainty between 1996 and 2019 may be as high as $94 billion (2019$) for firms within a 200-mile radius around the eye of a hurricane. – Kruttli, M. S., Tran, B. R., & Watugala, S. W. (2025). Pricing Poseidon: Extreme Weather Uncertainty and Firm Return Dynamics. JOURNAL OF FINANCE, 80(2), 783-832. https://doi.org/10.1111/jofi.13416
  • In the aftermath of Hurricane Sandy (2012) firms in the U.S. that had suppliers or customers in the disaster-hit areas experienced a significant decline in sales growth, averaging 10 percentage points lower than firms without such links. In contrast, firms outside the U.S. that were connected to U.S. firms affected by the hurricane did not experience a significant decline in sales growth possibly due to their ability to substitute for impacted partners. – Kashiwagi, Y., Todo, Y., & Matous, P. (2021). Propagation of economic shocks through global supply chains-Evidence from Hurricane Sandy. REVIEW OF INTERNATIONAL ECONOMICS, 29(5), 1186-1220. https://doi.org/10.1111/roie.12541

Local governments of hurricane-struck areas face reduced fiscal revenues through a variety of mechanisms. Federal disaster relief payments may only partially offset damages and earnings losses:

  • For hurricanes of Category 3+ occurring in the U.S. between 1979 to 2002, based on FEMA HAZUS-MH simulations, per capita damage was about $700 (2013$) while per capita disaster relief payments during that time amounted to between $180 and $185. Additionally, for a period of ten years following these hurricanes per capita earnings losses were estimated to be $4,300 while per capita federal payments to restore these losses (through social safety net mechanisms) amounted to $1,700. For all hurricanes during the period social safety net payments were estimated to be between $44 billion and $65 billion. – Deryugina, T. (2017). The Fiscal Cost of Hurricanes: Disaster Aid versus Social Insurance. American Economic Journal: Economic Policy, 9(3), 168–198. https://doi.org/10.1257/pol.20140296 
  • Coastal counties in Florida experienced a mean monthly loss in revenue of $12.5 million (2018$) (inland counties experienced losses of $7.5 million) from storms hitting between 2009 and 2018. For coastal counties, this impact can persist for 3 months, extending beyond physical impacts to reputation impacts and tourism avoidance. – Brown, C.E., et al., (2021) The economic impacts of tropical cyclones on a mature destination, Florida, USA. JOURNAL OF DESTINATION MARKETING & MANAGEMENT, 20. https://doi.org/10.1016/j.jdmm.2021.100562 
  • Hurricanes cause fiscal impacts on local governments in the U.S. Atlantic and Gulf states. Local revenue sources, including taxes and fees, decline by up to 2% in six to ten years following a hurricane; major hurricanes reduce aggregate local revenues by 7.2% over ten years, more than double the effect of average storms. Spending on public works, including water, sewer, rubbish, and public transit, declines by 3.4% in the six to ten years after exposure; and total municipal debt falls by 19.2% to 25.9% in the decade following a major hurricane (partly caused by ratings agencies, such as Moody’s Analytics, downgrading bond ratings in the aftermath of a hurricane). – Jerch, R., Kahn, M. E., & Lin, G. C. (2023). Local public finance dynamics and hurricane shocks. JOURNAL OF URBAN ECONOMICS, 134, Article 103516. https://doi.org/10.1016/j.jue.2022.103516