The recession in the US is showing signs of ending as a result of the inventory cycle and the easing in credit restrictions, according to Principal Global Investors global chief executive Jim McCaughan.
"Inventories have been cut very sharply, businesses didn't want to have any credit or couldn't get credit, so the inventory cycle has got to a point where it's really got to start stabilising and I think that's the fundamental driver," McCaughan said.
Other patterns are emerging in the US economy right now that historically have indicated a recovery is on the way.
"The US economy is seeing rising unemployment but improving consumer confidence. That is absolutely typical of the end of a recession," McCaughan said.
"It was like that in 1973/74, it was like that in 1989/90. It's just a typical playbook for this time in the economic cycle and it's always the inventory cycle that really turns it," he said.
But while the economic recovery may be on its way in the US, McCaughan said people should not get the impression markets will return to the levels experienced just before the crisis began.
"Don't expect business as usual and the recovery to look like 2004 to 2007 - it won't," McCaughan said.
"People are shocked ... and people will take years to get over the shock," he said.
A good indicator of this is the US personal savings rate, which has jumped significantly during the downturn.
"After the 1973/74 recession, which had some features in common with the last two years ... the US personal savings rate kicked up to the 12 to 15 per cent range and stayed there right until the early 80s," McCaughan said.
"So people saved to rebuild their financial balances and I'm expecting the same thing to happen now."
