Rising exports and falling unemployment will drive US growth in 2011 and allow the country to avoid comparisons to Japan's lost decade, Goldman Sachs Asset Management economist Jim O'Neill told CNBC.
Too many investors are still stuck in a crisis mindset and need to see the "big picture" that shows the US is poised for strong growth ahead, O'Neill said, reiterating comments he made in a note to investors.
"I think we could be in for a repeated number of surprises," he said. "As we see the year change into 2011, I think we're going to see a lot of people change their minds."
With exports driving higher and weekly jobless claims edging lower toward 400,000, that could provide the catalyst for sustained growth, he suggested.
O'Neill said that would most readily show up in consumer cyclical stocks as well as strong multinational companies. He is projecting GDP that could eclipse 4 percent and stock market gains of 20 percent for the year ahead.
"It's almost like somebody sprinkled some magical powder after the midterm elections and a light suddenly came on," he said, referring to the US elections that saw Republicans take control of the House of Representatives.
The long-standing correlation between a weak dollar and a strong stock market also is breaking down, which O'Neill said points to a stronger economy overall.
"A modest recovery of the dollar on the back of rising real yields and circumstances of a stronger US economy almost definitely will lead to some breaking down of those correlations," he said. "We'll get back in some ways to a normal that we knew of yesteryear."