Fed Chairman Powell is saying that the Fed believes there’s systematic upward bias in the government’s monthly job numbers estimates, one that adds about 60,000 extra jobs to the published figures. This would mean that the economy was gaining about 100,000 new jobs each month during the last two years of the Biden administration, not the 150,000+ reported.

More important for us as investors now is the implication that there has been no net job creation during the first 11 months of the second Trump administration. Maybe even net job losses. Add to that the ICE campaign to imprison and deport migrant workers, while discouraging new arrivals, and my conclusion is that the domestic economy is either in or very near recession.

I have no idea whether this outcome is accident or design. In either event, it suggests, I think, that investing in the domestic stock market as if the US is a third-world country (meaning domestic costs and foreign revenues)–which has generated very large relative returns this year–still has considerable room to run.