The storm that flooded New Orleans, obliterated Gulfport, Miss., and hit Biloxi, Miss., with fatal results is putting a dent in the entire nation's economy.

Even as rescuers pushed Wednesday to contain a mounting death toll and help stranded residents in the ravaged Gulf Coast, hurricane Katrina's financial impact was also emerging as an issue that reaches far beyond Louisiana levees or Alabama inlets.

Whether that cost proves to be relatively modest - shaving perhaps half a percentage point off of an economy growing at a 3.3 percent pace - or a more severe shock depends on one key factor: energy.

The Bush administration moved Wednesday to open the Strategic Petroleum Reserve to ease looming supply shortages. With 10 percent of the nation's refining capacity, plus pipelines through which much of America's domestic and imported oil passes, the region has an outsized oil and gas role that makes this storm's impact much broader than that of other major hurricanes, or even the combined wallop of four hurricanes in Florida last year.

"This is more significant," says economist John Silvia of Wachovia Corp., a banking giant in the region. And if supply disruptions prove difficult to fix quickly, "it's a very big complication."

The prospect of $3-a-gallon gasoline, rising airline ticket costs, and soaring winter heating bills is accompanied by Katrina's more local effects: insured losses that could exceed the record (in current dollars) of $21 billion set by hurricane Andrew in 1992.

While the damage is devastating to residents, it promises to spur local economic activity as homeowners and businesses repair and rebuild in the months ahead.

Moreover, Katrina may prove to be a catalyst for longer-term changes - such as better fortifying New Orleans against storm surges or lessening the nation's energy dependence on the region - at a time when the intensity of tropical storms appears to be rising.

Still, the storm left thousands homeless, killed at least 100 in hardest-hit Mississippi alone, and damaged homes far inland in states such as Tennessee and Georgia. Estimates of insured losses go as high as $26 billion.

The Gulf region accounts for only about 3 percent of US economic output, but financial markets are focused on its much greater role in energy production. Stocks crept higher in early trading Wednesday as oil prices retreated when the government released oil from the strategic reserve. Before the announcement, prices had surged above $70 a barrel.

Still, the government's move does not remedy the damage to refineries that churn out much of American's gasoline.

Katrina's effect on America's gross domestic product are mere guesswork at this point. The government reported Wednesday that in the second quarter of this year, GDP grew at an annual rate of 3.3 percent, down from a 3.8 percent pace at the beginning of the year.

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