As the storm moves into hilly terrain, it's also expected to unleash catastrophic and potentially deadly flash flooding and possibly mud slides, the hurricane center warned.
They were the first known deaths attributed to Tropical Storm Florence, which was a Category 1 hurricane when it struck the city.
More than 722,000 homes and businesses were without power in the Carolinas early on Friday, utility officials said.
The Red Cross said it had to cancel many blood drives in the area due to Florence and is urging residents in non-impacted areas to give blood.
Authorities warned, too, of the threat of mudslides and the risk of an environmental disaster from floodwaters washing over industrial waste sites and hog farms.
"You need to be prepared to be without power for weeks", Holding said, pointing out that Hurricane Fran knocked out power for two weeks and Hurricane Matthew left him without power for five days. Storm surge expert Hal Needham, director of Marine Weather and Climate in Miami says the hurricane's strong winds will likely blow ocean water into bays. "The longer you have this hurricane wind flow, the longer you push that water well inland", he said. Traffic lights out of order because of power failures swayed in the gusty wind.
North Carolina Governor Roy Cooper said Florence was set to cover nearly all of the state in several feet of water.More news: Hurricane Florence forecast: What to expect beyond landfall
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The rising sea crept toward the two-story home of Tom Copeland, who lives on a spit of land surrounded by water in Swansboro. "Nothing's hit the house yet, but it's still blowing".
The company said as many as three-fourths of its 4 million customers in North Carolina and SC could lose power.
Video taken in several towns in the Carolinas showed emergency personnel wading through thigh-high water.
But the danger comes not so much from the wind as from the storm surges, which could raise the sea level to 4 meters in some points and flood the coast.
New Bern Mayor Dana Outlaw told The Durham Herald-Sun around 5am that about 200 people had been rescued so far.
More than 12,000 people were in shelters in North Carolina and 400 in Virginia, where the forecast was less dire. More than 1.7 million were ordered to evacuate in advance of the storm.
More than 3,000 inmates at North Carolina prisons and juvenile detention centers were moved out of the storm's path.