The latest indicators show the economy is finally on the mend, but economic experts and government officials caution that it will be a slow recovery.
Analysts predict the U.S. economy is growing in the current quarter, which ends Sept. 30, at an annual rate of 3 to 4 percent, according to an Associated Press report. It shrank at a 1 percent pace in the second quarter, much slower than in previous quarters.
However, while Federal Reserve Chairman Ben Bernanke said the recession is very likely over at this point, he warned that current economic growth won't be sufficient to prevent the unemployment rate, now at a 26-year high of 9.7 percent, from rising, the Associated Press reports.
Bernanke said the economy is coping with "ongoing headwinds," including hard-to-get credit for consumers and businesses, and households saving more, spending less and trimming their debt. Those forces can weigh down the recovery, he said.
Still economists and government officials were encouraged by a recent report showing a surge in retail sales for August. The Commerce Department said retail sales climbed 2.7 percent last month after declining 0.2 percent in July. It was the biggest monthly advance since January 2006 and well above expectations on Wall Street for a 2 percent gain, according to a report from Reuters.
"Retail sales show the recovery is here. This wasn't just autos, it wasn't just gasoline. This was the U.S. consumer getting out of their foxhole," T.J. Marta, market strategist at Marta on the Markets in New Jersey, told Reuters. "This is indisputably a good number."