The costs of extreme heat, at least $100B a year, will rise to staggering levels, says the former Fed economist who’s so influential they named a recession indicator after her

A dollar bill on fire (Credit: Sebastian Gorczowski—Getty Images)

This year has seen the hottest summer ever recorded, with the toll of extreme heat visible in the deadly fires in Maui, a blistering monthlong heat wave in Phoenix, and temperatures in the Middle East so scorching that Iran shut down for two days. (Yes, the whole country shut down.)

The heat is also taking an economic toll as workers everywhere adapt by working more slowly or shortening their hours. But what does that add up to? A report by the Atlantic Council estimated in 2021 that high temperatures cost the economy $100 billion a year by reducing labor productivity, but the hottest summer in 100,000 years could be changing that calculus, fast.