With riots on the streets & states returning back to normal it seems likely the spread of COVID-19 will ramp up…
Based on simulations, it now appears the most likely scenario is:
- Around 3 million dead by March 2021
- 1.5+ million dead by the fall – if people keep gathering
- 25% unemployment by 2021
- 15% reduction in GDP
This is a worse scenario than either my predictions on COVID-19 vs The Economy March 21, 2020 and COVID-19 U.S. Fatalities & Economic Predictions April 30, 2020.
Prior COVID-19 Prediction (April 30, 2020)
Prior predictions (April 30, 2021):
- Between 1 – 2 million COVID-19 deaths in the United States is likely
- 25% unemployment in the United States is likely
- 15% reduction in GDP is within reason
State of COVID-19 Information (June 7, 2020)
As of June 7th, we have little new information since April 30.
- Vaccine will very likely not be widely available before 2021
- Effectiveness of vaccines is unknown, no way to evaluate
- A vaccine will probably not be 100% effective (see similar vaccines)
- Fatality rate in the U.S. has been holding at 8%, though that number is likely lower (due to lack of testing)
Unfortunately, we still have the same unknowns:
- If reinfections can occur and if so how long (more evidence reinfections can occur)
- How quickly the virus is mutating
- The true infection rate
- The true fatality rate
COVID-19 Analysis
Continuing the trend of using a simulation from Research group of Richard Neher at the Biozentrum, University of Basel.
Thus far the simulation(s) have been relatively accurate and now if we assume higher transmission rate(s) due to “opening up” and protesting… well it’s going to get bad fast. By July 12th, 2020 this model is predicting 425k deaths —
The full report can be downloaded here or you can manipulate yourself. Generally, the simulation has been accurate and aligns to previous data. See the prior article to compare, but generally in the simulation above, we are expecting a massive reduction in the effectiveness of “social distancing” from June 1st until July 4th. If during that time-frame we are only about 30% more “distant” than we were in 2019, then we should expect massive Covid-19 fatalities. For reference, we assume in March through April lockdown effectiveness at social “distancing” was probably 75-85%.
Personal COVID-19 Analysis
In addition to the simulation above, I also have been running the numbers myself. Regarding my prediction — I took a few cities in the United States and gathered statistics via the John Hopkins U.S. Map. I then assumed we are only identifying 1/15 of the real cases and applied a 2.5x multiple to the current deaths. This accounts for the lack of testing and future deaths of those infected. From there, if we assume a 80% infection rate by March 21, 2021 we can expect 2.7+ million deaths, with a fatality rate around 1.03% (around 10x the flu). See predictions (Google Sheet link).
The reasoning behind the adjusted multiple for true infections (now 15x, was 20x before) is because testing capacity is up 100% from one month ago.
In addition, the number of people testing positive has also decreased by roughly 50%.
This implies testing is being targeted to the correct communities and thus we are getting closer to an accurate count of “real” cases (although still fairly off).
I think it’s also important to note that while states are opening up, states such as California are still having and increasing number of COVID-19 test every day — Which should spike with the protests & everything opened this week:
The data & code for the above graphs can be found on my github.
Economy Analysis
Just for fun, I thought I’d review the economic outlook as well… to be frank. I have no idea.
My gut tells me we will need another lockdown – fast. I also think millions dying, the possibility of reinfections, “trade wars”, the government aid ending in June and banks & businesses folding – we should see a downturn in the economy. My previous assessment on the economy accounted for all of the factors and a 25% unemployment by March 2021 seems like the most likely outcome.
That being said, will the stock market follow? I have no idea. It’s going to probably hit record highs this week. Although, I suspect inflation may be as high as 25%. I’m paying 25% more for groceries, the stockmarket is up 35% from it’s March 2020 lows (as of June 7th) – which I suspect is inflation.
In terms of GDP loss, I expect GDP adjusted after inflation to be around 15% loss. This is accounting for ~5% per quarter.
See prior predictions for a more detailed analysis (as it hasn’t changed).
Updated COVID-19 Prediction
With all the available information, it seems reasonable to conclude that by March 21, 2021:
- 3 million COVID-19 deaths in the United States is likely
- 25% unemployment in the United States is likely
- 15% reduction in GDP is within reason
This is on track with my previous prediction five weeks ago and hopefully I’m wrong.