The stock market "has an awful good gig going," with the economic recovery reaching all corners of the globe and U.S. inflation and interest rates still at historic lows, Leuthold Chief Investment Strategist Jim Paulsen told CNBC on Friday.

"We've got a fully employed economy, rising real wages. We restarted the corporate earnings cycle. We've got strong confidence among business and consumers," he said on "Squawk Box."

"The kick is we can do all of this without aggravating inflation and interest rates," he said. "If that's going to continue, I think the bull market could continue to forever."

The Dow Jones industrial average (Dow Jones Global Indexes: .DJI) was coming off its seventh straight record high, a second close above 22,000 and was on track for a positive week ahead of Friday's release of the government's July employment report.

"Ultimately the bull market does continue until we aggravate some inflation, and until we have to raise bond yields and interest rates some more," Paulsen said.

"I think that's going to happen eventually, but it doesn't look like it's going to happen anytime soon. So I think the bull probably continues through the end of this year," he said.

While the Federal Reserve has raised rates twice this year — with about 50-50 odds of another hike in December ahead of the Friday jobs data — the cost of borrowing money remains at historic lows, which aids the economy and the stock market.

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