Forecasters also said the Category 1 storm's extreme size meant it could batter the US East Coast with hurricane-force winds for almost a full day.
USA reporter and hurricane expert Mark Schleifstein sent a dark warning on Twitter to all the residents living along the coast.
"It truly is really about the whole size of this storm", National Hurricane Center Director Ken Graham said.
Florence's winds dropped from a peak of 225km/h to 165km/h overnight, reducing the hurricane from a terrifying Category 4 to a 2. It is now at Category 1.
"Just because the wind speeds came down and the intensity of this storm came down to a Category 2, please do not let your guard down", Brock Long, the Federal Emergency Management Agency administrator, told reporters Thursday in Washington.
With winds picking up along the coastline early Thursday, federal and state officials had issued final appeals to residents to get out of the path of the "once in a lifetime" weather system.
North Carolina Gov. Roy Cooper urged people to take the storm seriously. "Catastrophic effects will be felt".
More than 80,000 people were already without power as the storm approached, and more than 12,000 were in shelters.
Hurricane Florence is expected to make landfall in the Eastern Seaboard on Thursday and Friday.
Long-duration, damaging wind gusts of 55 miles per hour or greater and saturated ground may cause a tremendous amount of trees to fall and lead to widespread power outages from the southern tip of Delmarva to Charleston, South Carolina and as far inland as Raleigh and Charlotte, North Carolina, to Columbia, South Carolina. "We got thrown into mailboxes, houses, trees", said Holt, who had stayed at home because of a doctor's appointment that was later canceled. "But we can't replace us so we chose to come here".
In its 1 a.m. Friday update, the NHC said Florence was about 45 miles east of Wilmington, NC, packing maximum-sustained winds of 90 mph.
"So this is a very risky storm", said Mr Long. It said it was located about 40 miles (65 km) west of Myrtle Beach, South Carolina, and forecasters predicted a slow westward march. The rainfall will cause prolonged significant river flooding.
On top of the potentially destructive hurricane, forecasters also put parts of North Carolina on tornado watch.
Although Charlotte is farther inland than the areas expected to the get the brunt of the hurricane force winds natives say they are anxious about the rain and risk of flooding.
Officials said some 1.7 million people in the Carolinas and Virginia were warned to evacuate, but it's unclear how many did.
Residents and business owners around downtown came out from their hiding places as early as 8:30 a.m. Friday, about an hour after the eyewall of Florence had passed through.
A state of emergency has been declared in five coastal states - North Carolina, South Carolina, Georgia, Maryland and Virginia.
Duke Energy, the nation's No. 2 power company, said Florence could knock out electricity to three-quarters of its 4 million customers in the Carolinas, and outages could last for weeks.
The page says service animals aren't barred from evacuation shelters, beaches shouldn't be used for sand bags, and evacuation orders aren't enforced by FEMA.
Except - and we don't mean to jinx it - but the storm *is* heading further south from here and the wind did die down a bit so who is to say it didn't work entirely?
"The shelters are not taking dogs", Ramirez said.