Hurricane Irene is expected to inflict tens of billions of dollars in damage before it concludes a three-day sweep that has left a trail of havoc from Atlantic beach resorts to Manhattan high rises, officials and others said Sunday.

Assessments were just starting to come in, but as the massive storm moved into New England it was already clear that it had caused widespread flooding and structural damage across a vast swath of the US eastern seaboard.

"I've got to imagine the damage estimates will be in the billions of dollars if not the tens of billions of dollars," said Governor Chris Christie of New Jersey, whose famed "Jersey shore" was shut down as hundreds of thousands of people fled the state's long, vulnerable coastline.

Irene weakened to tropical storm status Sunday as it crashed into New York City, the National Hurricane Center said, but the still powerful storm was flooding parts of lower Manhattan.

Experts said the financial toll would be much higher if, as transpired, there was a direct hit on New York, the US financial capital and largest city with nearly 19 million people living in its metropolitan area.

Economist Peter Morici put the immediate casualty losses from the storm at $40 billion, including the loss of two days of economic activity.

But Morici, a professor at the University of Maryland, said the impact would diminish significantly over the longer term as reconstruction spending kicks in, injecting fresh spending in recession-weakened regional economies.

"Rebuilding after Irene, especially in an economy with high unemployment and underused resources in the construction and building materials industries, will unleash at least $20 billion in new direct private spending-likely more as many folks rebuild larger than before, and the capital stock that emerges will prove more economically useful and productive," he said.

Another silver lining is that the storm made landfall over a weekend, mitigating the economic impact in coastal cities although dealing a direct hit to the tourist industry at the peak of the summer beach season.

Kinetic Analysis Corp., a company that does computer modeling of predicted storm damage, predicted Friday that Irene would cause $5-10 billion in damages, based on the latest available weather data.

Losses could include damage to flooded buildings, business interruptions and cleanup costs picked by the government, said Chuck Watson, the company's director of research and development.

Reporting on Sunday, the company said losses in North and South Carolina, the first states hit as Irene made landfall on Friday, are expected to range between $200 million and $400 million.

The costliest hurricane in US history was Katrina, which flooded New Orleans in 2005 and is estimated to have caused more than $133 billion in losses.

Irene was the 10th major weather-related disaster in the United States this year, making 2011 a record year, according to a study by the National Climactic Data Center of such events going back to 1980.

Major floods, drought, tornados and a blizzard had already inflicted more than 35 billion dollars in damage this year, said the study, which was posted on the website of the National Oceonographic and Atmospheric Administration said.

Irene threatens extended flight chaos
New York (AFP) Aug 28, 2011 - Hurricane Irene air chaos threatened to last well into the week, after the giant storm forced the cancellation of more than 10,000 flights across the eastern United States, officials said Sunday.

Aviation industry officials said New York's international airports would only start to reopen on Monday afternoon. American airlines, British Airways, Air France and other carriers have already called off many flights to and from Europe and Asia on Monday.

Even though Irene was downgraded to a tropical storm on Sunday, the New York mass transit system remained closed, along with train traffic across the northeast United States and many ports.

The Port Authority of New York and New Jersey, which runs New York region airport and port facilities, said it had not determined when airports would open.

"I can't even give you a guesstimate," authority spokesman Steve Coleman told AFP.

Flights resumed in the Washington region but remained severely disrupted.

The Federal Aviation Administration said more than 10,000 flights have been cancelled from Florida up to Massachusetts since Friday because of Irene, with the number of disruptions set to increase.

Tom Hendricks, vice president of the Air Transport Association, an industry body, said airlines "slowly repositioning" jets and crew that were hastily moved away from the storm's path.

He said operations in New York would resume Monday afternoon but added "it will take a couple of days to get the networks back."

Jet Blue chief executive Dave Barger told CNBC television his company's first flight from New York would be at 3:00 pm (1900 GMT) on Monday. The US domestic carrier accounts for more than 10 percent of the cancelled flights.

Irene forced the New York city subway and bus system to close for the first time because of a weather disaster. Mayor Michael Bloomberg has warned that trains and buses may not be running again until Monday afternoon.

The New York subway is one of the world's biggest with 468 stations served by some 6,380 cars.

The transport authority was worried that the 13 subway tunnels that go under the rivers that surround Manhattan could be flooded.

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