Larry Kudlow says the recession talk sweeping through Wall Street and the press is based on a fundamental misunderstanding of the latest GDP numbers — and a refusal to acknowledge the early effects of President Trump’s economic agenda.
On his Fox Business Network show Wednesday, Kudlow took direct aim at what he described as a “media and Wall Street obsession” with the headline 0.3 percent decline in real GDP during the first quarter of 2025.
“The liberal press and their pals on Wall Street are talking about recession — because the first quarter GDP was scored with a slight decline of three-tenths of 1 percent,” Kudlow said. “Yet if you look under the hood of the GDP report, and carefully parse through the numbers, what you actually come up with is a rather strong economy, that’s growing at something like 3 percent.”
Kudlow pointed to what he called “core GDP” — a measure that strips out volatile components like inventories, government spending, and net exports. That narrower but more stable measure, known formally as real final sales to private domestic purchasers, rose at an annual rate of around 3 percent in the first quarter.
“Mr. Trump has barely begun, but take a look already at core GDP — which takes out the fluky trade import numbers from tariff front running and looks at just the heart of GDP, which is private sector consumption plus private sector business investment,” Kudlow said. “Well, looking at core GDP, you see an actual increase in the first-quarter economy — of 3 percent, no less.”
