This Time It's Different, US Won't Stall: SocGen
Earnings, job numbers and a sell-off in commodities may have curbed investor sentiment towards the U.S. in recent weeks, but according to Societe Generale, the economy is now made of sterner stuff and will not return to a fragile stop-start recovery.
"This time will be different," Michala Marcussen, the global head of economics at Societe Generale, said in a research note on Monday. "The foundations for a sustainable recovery are now in place."
In mid-April, the equity bull run that sprung into life at the start of the year reversed. The S&P 500, the Dow Jones and the Nasdaq have all lost around 3 percent, after weak jobs numbers and a broad sell-off in gold, copper and oil halted the "risk-on" rally.
(Read More: Why US Jobs Market Is Going to Get a Lot Worse)
However, Societe Generale believes re-inflation in the U.S. economy has finally spread to housing, with Marcussen citing this as a key reason for a more robust recovery, and another bull run that will not herald a false-dawn.
"Wealth effects, which were a significant drag on consumption during 2007-2011, are now providing a modest boost to consumer demand. Rising home prices should also boost credit availability, both for new borrowers and those looking to refinance," Chief U.S. Economist Aneta Markowska and Research Associate Yacine Rouimi said in separate Societe Generale note on Thursday. The analysts added that home prices bottomed last year, and are poised to rise by nearly 30 percent over the next five years.
(Read More: Accounting Change to Boost US Economy by 3%)
"The balance sheet recession is over. With the U.S. consumer that represents 70 percent of the economy no longer facing headwinds, gross domestic product growth is poised to accelerate. We forecast above-trend growth for the next four years, starting in the second half of 2013," Markowska and Rouimi said.
Meanwhile, Marcussen forecast a positive supply side shock from the shale gas drive in the U.S. will path the way to 3 percent annualized growth, with businesses benefiting from lower prices at the pump.
(Read More: How to Jump-Start the U.S. Economy)
Marcussen also predicted the Federal Reserve will halt its current monetary easing program, in which it purchases $40 billion of mortgage-backed securities per month, this year.
"For the Federal Reserve, the challenge is when to exit quantitative easing and our call remains for a tapering of asset purchases to begin in the third quarter of 2013. This entails a gradual normalization of bond yields… something we believe that U.S. household balance sheets have the ability to absorb," she said.
—By CNBC.com's Matt Clinch; Follow him on Twitter @mattclinch81