The storm passed by Mexico's Yucatan peninsula - home to beach resorts incuding Cancun and Playa del Carmen - as it headed north.
As of Friday morning, the storm is forecast to reach hurricane status before it makes landfall along the Gulf Coast over the weekend.
"By Saturday and Sunday, expect mostly cloudy skies with about a 40-50 percent chance of afternoon storms", News 6 meteorologist Candace Campos said.
Forecasters said the tropical storm should keep moving to the north-northwest quickly through late Saturday.
A "life-threatening" storm surge warning was issued for an area from Morgan City, La., to the Alabama-Florida border and for the northern and western shores of Lake Pontchartrain.
The projected track of what will become Hurricane Nate at some point Saturday in the Gulf of Mexico has changed once again, this time pushing its landfall a little west to near Biloxi, Miss.
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And a hurricane watch was in effect east of the Alabama/Florida border to the Okaloosa/Walton County Line.
Parts of the city of New Orleans, devastated by Hurricane Katrina 12 years ago, are being evacuated. They are expected to reach 90 miles per hour by the time it makes landfall.
Rainfall of 3 to 6 inches with some areas of 10 inches are expected east of the Mississippi River from the Deep South to the southern Appalachians through Monday.
Eleven deaths have been reported in Nicaragua, 8 deaths were reported in Costa Rica, and one person was reported killed in Honduras, officials said.
Officials in MS and Louisiana have declared states of emergency in anticipation of the storm.
It said Nate should move back over water today and reach the Yucatan by tonight, then approach the northern Gulf Coast Saturday evening.