The US economy is officially rowing again. Indeed, the recession probably ended a few months ago, although it will be some time before the independent business cycle dating committee makes an official judgment.

The likely shape of the recovery, however, remains an open question, with the central uncertainty being how vigorously private demand will expand as government props for growth begin to fade.

Much rests on whether the beginnings of a recovery in consumer spending seen in the latest data – and so far financed by reduced savings – can be sustained.

There is reasonable clarity on the prospects for the rest of this year. Fourth quarter growth might be a shade weaker than the third quarter 3.5 per cent – with some evidence of a loss of momentum in September, and payback from the cash-for-clunkers programme ahead. But it will probably be in the same ballpark. The uncertainty revolves around 2010 and 2011.

Economists see a tug-of-war between the private sector's natural tendency to rebound briskly after a deep recession and the powerful headwinds of tight credit and balance sheet repair, which historically result in weak economic recoveries following financial crises.

At the moment most are betting that the net outcome will be a muted recovery in the 3 per cent range for next year, which would make only a small dent in vast unused capacity and unemployment.

Yesterday's data illustrate some key features of the recovery at its inception.

First, it is heavily reliant on government stimulus, with the spending side now beginning to kick in after boosts from tax breaks and transfers earlier in the year. When the stimulus fades it will take a heavy toll on growth, with the biggest pothole coming in 2011.

Second, housing construction has turned after three and a half years of contraction. Auto production has also probably bottomed out, with cash-for-clunkers eliminating excess inventories, though the scheme pulled forward demand, making this harder to read. Going forward, these two sectors should not be a big drag on growth.

Third, we are in the early stages of an economy-wide inventory swing that will support growth into next year – reducing the risk of a double-dip in the first half – but will eventually peter out, augmenting the drag from reduced fiscal stimulus.

Fourth, underlying consumer demand, while hardly vigorous, is stronger than might have been expected given everything the consumer has been through in the past two years.

After allowing for inflation, consumption rose at an annualised rate of 3.4 per cent in the third quarter following a decline in the second quarter. A good slug of the increase was spending on autos, but not all.

Households managed to increase spending, in spite of the fact that real disposable incomes fell 3.4 per cent annualised in the quarter, by reducing their savings rate from 4.9 per cent in the second quarter to 3.3 per cent in the third.

The central question is whether this is a blip or whether US consumers are now broadly comfortable with their savings and wealth. Most economists expect the savings rate will move back to the 4 to 5 per cent range consistent with the consensus weak recovery scenario.

Many still think the savings rate needs to rise to 6 to 8 per cent or more – which would imply a much weaker and more fragile course in 2010.