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Forget frozenomics, worry about 'overheat' Pro

Forget the frigid weather, one market professional suggests.

This winter's freezing temperatures and record snowfalls have done much more that cripple highways and air traffic, strategist Jim Paulsen said Wednesday. The frozen weather has masked the economy's true momentum.

The speed at which the economy bounces back could "shock" investors, Paulsen said during an interview on "Squawk on the Street." Paulsen, chief investment strategist at Wells Capital Management, said a combination including declining unemployment rates and exploding commodity prices can mix a potent "cocktail of overheat."

(Read more: Alan Simpson: US 'sucking on canal water' soon)

Paulsen predicts 3 or 3.5 percent GDP growth as the economy makes up losses from this quarter during the spring and summer.

"If wages started to rise at all in the spring or summer, I think we could have a little mini-overheat panic," Paulsen said. "But between now and then, one of the reasons why stocks are going up as forcefully and as strong as they are ... is because the reality is that the economy and the undertow of it are far stronger than people perceive right now. And we may find that out later."

Paulsen's warning comes as the Institute for Supply Management released data that showed growth in the services sector declining to its slowest pace since February 2010. Paulsen said the report was so disappointing, it had to be from the cold weather rather than an true economic slowdown.

(Read more: Investing tips to deal with rising interest rates)

Jeffrey Solomon, the CEO of Cowen and Co., told CNBC he remained optimistic on the state of U.S. manufacturing despite the soft service industry data. He sees a trend of capital investments flowing out of foreign countries back into the United States, a pattern that portends a "reshoring" of manufacturers.

"My view is we're still dealing with some of the side effects of what happened in 2008," Solomon said. "It's going to take a very long time for things to return to some sense of normal."

Solomon said U.S. stocks seem like a strong investment in the current environment, as big rallies following wide selloffs bode well for the market, even amid volatility from geopolitical events such as the crisis in Ukraine.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." Reuters contributed to this report.

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