Wall Street veteran Jim Paulsen argues that most of the US economy is in a recession, with tech spending being the sole bright spot. The strategist with over 40 years of experience contends that real private GDP growth of 2.3% in 2025 masks deeper economic weakness.

Paulsen's analysis shows that excluding 'new era' investments, the remaining 89% of real private spending grew by just 1% with no job creation. He focuses on business spending on information processing equipment and intellectual property as a measure of tech-driven growth, which has expanded nearly 2.5 times faster than traditional private-sector spending.

This economic bifurcation mirrors the stock market's 'Magnificent Seven' dynamic, where a small subset drives overall performance while the majority struggles. Paulsen warns that focusing on aggregate GDP growth misses the fact that 89% of the private economy is not doing okay, creating a disconnect between economic data and public sentiment.