The ‘old era economy’ is in a recession<\/p>\n
Real private GDP<\/a> rose 2.3% in 2025, Paulsen said, but nearly all of this economic growth is tied to what he calls “new era” growth. <\/p>\n “Excluding new era investment, the other 89% of real private spending rose by only 1% with no job creation,” the strategist wrote.<\/p>\n \n Every time Naomi publishes a story, you’ll get an alert straight to your inbox!\n <\/p>\n \n Stay connected to Naomi and get more of their work as it publishes.\n <\/p>\n Real GDP is generally considered to be a good measure of economic growth, but in recent years, the metric has seen several distortions from factors like government spending, tax changes, and tariff-fueled<\/a> supply and demand volatility. Focusing on private real GDP strips out some of these distortions.<\/p>\n “Do we really need to continue focusing mostly on inflation when 89% of the private economy is in a recession and the 11% which is booming \u2014 new era pursuits \u2014 are by their very nature ‘disinflationary’?”<\/p>\n The ‘new era’ economy is booming, lifting GDP<\/p>\n The strategist focused on business spending on information processing equipment and intellectual property, using it as a measure of “new era” spending. This would include big tech’s mega spending on AI<\/a>.<\/p>\n Paulsen found that the new era subsection has grown nearly 2.5 times as fast as traditional private-sector spending. This gap has only widened in more recent years.<\/p>\n New era investment spending weight on real private GDP has grown since 1965<\/p>\n New era investment spending has had a growing influence on real private GDP, Jim Paulsen’s calculations show.<\/p>\n New-era private spending grew 14% in 2025, compared to 1% growth in private spending, excluding the tech-focused subset.<\/p>\n “Overall, new era pursuits have grown rapidly and their influence on the overall U.S. economy has become outsized relative to old era activities,” Paulsen wrote.<\/p>\n New era and old economy gap mirrors Mag 7 and the other 493<\/p>\n Paulsen compared the widening gap to the stock market narrative of the Magnificent Seven vs. the other 493 stocks in the S&P 500. <\/p>\n The stock market lately has seen gains broaden, with AI disruption fears<\/a> and the war in Iran<\/a> supporting a broader rotation<\/a> out of former tech leaders.<\/p>\n The dynamic between the new era economy vs. everything else shows deeper bifurcation.<\/p>\n “When the President<\/a>, the Federal Reserve Chairman<\/a>, economists, financial pundits, and journalists imply overall real GDP growth currently remains okay, it misses the fact that, similar to the stock market, although the aggregate growth number appears satisfactory, the great bulk of the economy \u2014 89% — is NOT doing okay!”<\/p>\n This dynamic could explain the mixed sentiment among economists<\/a> as well as the discrepancy between the American public’s negative view of the economy<\/a> and what economic data signals.<\/p>\n","protected":false},"excerpt":{"rendered":"The US economy has proven more resilient than many feared, but one Wall Street veteran says that a…\n","protected":false},"author":2,"featured_media":331350,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-331349","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/331349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=331349"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/331349\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/331350"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=331349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=331349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=331349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Image](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/03\/6978cd83a645d11881880a03.jpeg\")
<\/p>\n<\/p>\n
\n Jim Paulsen’s Substack PaulsenPerspectives
\n <\/a><\/p>\n