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Yippee! Economy grew at good clip after all. Is US out of the woods yet?

The US economy grew at an annual rate of 2.5 percent in the second quarter – higher than the initial 1.7 percent estimate. That's much better, too, than the first quarter's 1.1 percent. But stumbling blocks lie ahead.

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A sign is shown in the window of a retail store in San Francisco, Calif., May 13, 2013.

Robert Galbraith/Reuters/File

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The US economy grew at a 2.5 percent annual rate in this year’s second quarter, a pace that’s solid but doesn’t wipe away all financial worries for American workers and consumers.

The good news is that 2.5 percent is stronger than the 1.7 percent initially estimated when the government first reported on second-quarter growth a month ago. Many forecasters see that momentum continuing.

Even so, for millions of Americans the recovery from a deep recession is far from complete.

 

The economy, moreover, faces real or potential challenges in the months ahead – including uncertainties about both foreign trade and the impact of policies in Washington.

“Threats … can easily be seen from potentially higher oil prices [to] political discord in Washington and the impact of higher interest rates on housing and other interest rate-sensitive sectors,” Doug Handler, an economist at the forecasting firm IHS Global Insight, wrote in an analysis of the latest government numbers.

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