Excerpt from "The Most Important Number of the Week Is 6.4%" by Robert Burgess

Some economists and investors have started to turn their attention to the long-term effects of the pandemic on the economy. The early research suggests those forecasting a new “Roaring ‘20s” may be disappointed.

Cumberland Advisors Inc. co-founder and Chief Investment Officer David Kotok took the concept of excess deaths one step further in a research note to clients this week. He pointed out that each excess death results in a computation known as years of life lost, or YLL. A study published in the Journal of Public Health last month estimated there were 9.2 YLLs per death. 

Sure, Covid-19 has impacted the elderly disproportionately, with those 65 and over accounting for 80% of deaths and therefor contributing relatively little to YLL. But that’s still means a not insignificant 20% are under the age of 65. Cumberland estimates a Covid-19 shock of about 10 million YLL in the U.S. by the end of this year, contributing to a lasting economic “demand shock” that will act as a drag on growth.

Continued at Bloomberg: https://www.bloomberg.com/opinion/articles/2021-05-01/the-most-important-number-of-the-week-is-6-4?sref=XreMbXAF

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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.