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.

And those afflicted with the disease of “Trump Derangement Syndrome” are now talking about recession in the second quarter.

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.

That’s right.

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.

Well, looking at core GDP, you see an actual increase in the first-quarter economy — of 3 percent, no less.

And, then, if you look deeper into the numbers, you find even better news.

Private business investment is up, while government spending is down.

That’s right. Business fixed investment increased nearly 10 percent at an annual rate in the first quarter.

And, even better, business equipment and machinery — which is an incredibly important harbinger of productivity, job increases, and real wage hikes — rose an incredible 22.5 percent.

There’s no recession there.

For the entire GDP report, 22.5 percent is the most important number.

What’s going on here? Why are the recessionistas so badly wrong? What have they missed?

Well … President Trump’s “one big, beautiful bill” will pass both houses of Congress, probably around the Fourth of July holiday, only a few months away.

Mr. Trump has said repeatedly that he will give business investment a 100 percent expensing write-off.

Plus, he will provide factory investment and building the same 100 percent immediate depreciation.

And, crucially, he has said that all of this will be retroactive — to January 20, 2025.

On top of all that, let’s not forget the corporate tax rate for Made in America goods would drop to 15 percent from 21 percent.

So, what’s actually happening is that businesses are front-running the big beautiful tax cut that will be coming their way.

It’s a phenomenal story.

It’s a story of reshoring.

It’s a story of how the business tax cuts — along with the new personal tax cuts for service worker tips, overtime, and seniors’ Social Security benefits — will far outweigh any drag from tariffs.

Here’s another point: In March, the personal consumption deflator came in at 0.0 percent.

The core deflator also came in at 0.0 percent.

And don’t forget the consumer price index in March actually fell one-tenth of 1 percent.

All of this inflation progress sets up a Federal Reserve cut.

That’s right, a rate cut should be coming.

And, lastly, focusing on the GDP numbers again, there’s a math problem at work.

Yes, imports jumped a huge $333 billion in the first quarter, but inventories only increased $140 billion.

That leaves $193 billion unaccounted for. There’s a gap. Where’d those trade imports go?

Did the roughly $200 billion gap between imports and inventories just evaporate?

The pencil pushers over at the commerce department clearly can’t count.

So, I’m just going to take that missing $200 billion and add it into overall GDP.

I think they subtracted it, so I’m going to add it back in.

And, when I do that, the real GDP growth in the first quarter of 2025 comes out to be 3.2 percent. Even better than private domestic sales.

And that sets up an economy boosted by tax cuts and deregulation that can roar — perhaps in the second quarter, but certainly by the second half of the year and well into 2026.

From Mr. Kudlow’s broadcast on Fox Business Network.