New York authorities said Sandy killed at least 40 people in the city and the number was likely to climb further. At least 92 people have now been reported dead across the 15 states hit by the hurricane on Monday night.

Fuel shortages led to long lines of cars at filling stations in many states and the country faced a storm bill that some economists have estimated at $50 billion.

More bodies are being found as police and firefighters continue "their lifesaving mission, going block-by-block and door-to-door in the areas devastated by the hurricane," New York Mayor Michael Bloomberg said.

With about 650,000 people still without power in New York, Bloomberg said the city would start handing out food and water, while National Guard officers and police would go into high-rise buildings to help the elderly.

The Con Edison power company said some New Yorkers would have to wait until November 11 before electricity is restored.

National Guard officers helped rescue people trapped in flooded homes across the Hudson River from New York in Hoboken, where authorities estimated on Wednesday that 20,000 people were stuck in their homes.

The floodwaters receded slowly, leaving scenes of desolation. A yacht, thrown up by the storm, blocked one street near the Hoboken ferry terminal.

The Harman family was bailing out the flooded garage they had used as a storage space. Already, they had filled a dumpster with ruined belongings and a new pile -- children's toys, furniture and household equipment -- gathered on the sidewalk.

Christine Harman, a 43-year-old lawyer, said Hoboken residents were trying to keep their spirits up despite the lack of heat, power and in some apartments, water.

"We're sticking together. In our building we had a party last night. We had a grill on the roof and we cooked the meat that was going to go bad and drank the beer that was going to go off," she told AFP.

New Jersey, which President Barack Obama visited on Wednesday, has emerged as the state with the most widespread destruction.

Some 1.8 million people there had no electricity more than three days after the storm struck and fuel shortages caused huge queues of cars at gas stations.

Obama and Republican White House challenger Mitt Romney resumed full campaigning on Thursday five days out from a nailbiter election, although the tone of their attacks was more muted in the aftermath of the tragedy.

Aboard Air Force One as he launched an ambitious swing through four vital battleground states, Obama took the time to call the governors of worst-hit states New York, New Jersey and Connecticut, the White House said.

Meanwhile, the first subway trains brought some cheer to New York City.

A skeleton service started just before dawn and trains were quickly packed.

Train rides were to be free on Thursday and Friday. "It is not comfortable, but it is a huge relief to get moving again," said commuter Dave Stetman.

In a bid to avoid traffic gridlock, Bloomberg said that until Friday cars entering Manhattan must carry at least three people. Police set up checkpoints at bridges and turned back hundreds of cars.

Some heartbreaking stories have emerged from the storm.

Two brothers, aged two and four, were swept from their mother's arms in the floods as the family tried to escape the rising seas in Staten Island in the New York suburbs.

Glenda Moore's car became stuck in the water and she was carrying the boys to seek help when they were swept away, the New York Post said. The boys, Connor aged four and Brandon aged two, were found dead.

Others victims were electrocuted or drowned in flooded basements. A growing number of people were killed by poisoning from the fumes given off by diesel generators put into use since the storm.

The Shell oil company said that Sandy triggered an oil spill in the waters off New York and said cleanup efforts were under way.

The Coast Guard, which is overseeing the cleanup, said refinery operator Motiva had estimated up to 300,000 gallons (1.1 million liters) of diesel fuel had leaked from the plant at Sewaren, New Jersey.

Hurricane Sandy brought devastation throughout the Caribbean before hitting the United States and Canada. The overall death is now at least 163.

The Coast Guard also called off the search for the missing captain of a replica of the HMS Bounty merchant vessel, which went down in high seas of the Carolinas.