The US economy has recovered and its expansion is beginning to accelerate, a US economist says.
Principal Global Investors chief economist Bob Baur says US gross domestic product (GDP) is back to pre-global financial crisis levels.
"I would say the US recovery is over ... we're into an expansion. Real GDP is now above its December 2007 highs. So we've reached a new peak," Baur told AAP in an interview.
"By the technical definition of a recovery, the recovery is over and now we're into an expansion."
The US annual rate of GDP growth in the December 2010 quarter was 3.2 per cent, and 2.6 per cent in the September quarter.
Before the global financial crisis, the annual rate was 2.9 per cent in the December 2007 quarter, and 2.3 per cent in the September quarter of that year.
Baur said all the indicators were for US economic growth to pick up pace.
"Frankly, I think it's an accelerating expansion," he said.
"US manufacturing is doing extremely well.
"If you look at the several last purchasing managers surveys, they're doing very well. The employment part of that last survey is the highest since July 1973.
"So we think the US is accelerating and it's in a non-inflationary environment and we call it maybe kind of a sweet spot, almost."
One of the lagging economic indicators for the US economy is the unemployment rate, which is still near the 10 per cent mark.
However, it fell to 9.4 per cent in December 2010, from 9.8 per cent in November.
Baur expects the unemployment rate to fall steadily throughout 2011 and 2012.
"Our forecast for the end of this year is for unemployment to be about 8.6 or 8.7 (per cent)," he said.
"At the end of next year it'll be about 7.4 or 7.5 (per cent).
"It's coming down slowly, but it's coming down."
One of the ways the US tried to stimulate the economy during their recession was the US Federal Reserve undertaking a program of quantitative easing (QE).
The Fed bought government bonds from commercial banks to increase their cash reserves and encourage an increase in lending.
However, Baur questions how much the QE program stimulated the US economy.
"Mostly what (US Fed chairman Ben) Bernanke has done is add excess reserves to banks that are just sitting there," he said.
"They're not being let out.
"That's more due ... not to banks not wanting to lend, but more to the (lack of) demand and the demand for lending is starting to come back now."
Baur said quantitative easing would end in late June after the Fed's meeting of the Federal Open Market Committee that month.
Principal Global Investors is a global financial services firm with US$280 billion of its clients' funds under management.