In particular, the construction jobs that might result for needed repairs won't be in the housing bubble centers -- none of them were affected by the storm. While the states Irene thrashed certainly won't reject a few extra jobs here or there, they aren't the ones that need the jobs as desperately as some others.
Spending for Repairs Is Non-productive
But as alluded to before, this spending isn't the sort of spending that actually helps an economy in the long-run. Imagine you total your car. You must buy a new one. As a result, the dealership and automaker get an additional sale. That's great, right?
Well, for those who benefit from the sale it's great. For everyone else, it's terrible. The insurance company is worse off, as it had to pay for the claim. You are also worse off, as you probably have to pay an insurance deductible and your insurance premium will likely rise. And that new car isn't fulfilling a new purpose that will further economic growth; it's merely replacing a destroyed car. Moreover, the money you and the insurance company spend won't be used for other investment or spending.
So on balance, there's a net long-term loss to the economy equal to the value of the capital destroyed. And in the medium-term, the spending is probably also neutralized, since you would have needed a new car in a few years anyway.
All of this analysis applies to repair spending due to a hurricane. Any short-term boost is just that: short-term. Those new jobs are temporary and will go away once the repairs are completed. Ultimately, the insurance companies, government, and consumers will all be worse-off.
A Tiny Boost
In the 23rd of 24 paragraphs of the Politico article referred to above, University of Maryland economist Peter Morici estimates that that property damages will result in about $20 billion. He also says that spending will decline by $11 billion as a result.
So let's be optimistic and say that all that net $9 billion spending for repairs occurs in the second half of 2011. That would add 0.07% to the nation's 2011 annual growth. Of course, this also assumes that the storm doesn't also cause net exports to decline (it probably will). While welcome, this increase isn't going to suddenly revitalize the nation's economic recovery.
We also should note that the problem in the U.S. is that firms aren't using the money they've been accumulating to hire. In order to bring on more workers, they would need to sense a permanent demand increase. Storm-related spending won't cause such a shift, since it's temporary in nature. Moreover, this money firms are spending on repairs might have went to hiring more workers instead.
Is It Really New Spending?
And as the above analysis shows, a large amount of the spending that will occur will be eaten away by spending that now won't occur because consumers will pull back. Let's go back to the car analogy. In the best-case scenario, you've got insurance. If your premium increases and you're forced to pay a deductible, then you'll spend less on other goods and services. Some of that money you would have spent anyway, but now it will merely go towards your car insurance instead.