WASHINGTON -- A surprisingly strong 3.3 percent spurt for second-quarter growth has failed to quell a raging debate on the outlook for a US economy still being held back by weak housing and tight credit.

Some economists argue that the robust growth pace is the result of temporary factors and that recession remains possible. Others say there are signs the world's largest economy has turned a corner.

Scott Brown, chief economist at Raymond James & Associates, said he sees conflicting signals in recent economic data.

"A lot of the monthly indicators are suggesting recession but things like new orders and GDP suggest the economy is improving," Brown said after the Commerce Department revised upward its estimate of gross domestic product growth from last month's figure of a 1.9 percent annualized pace.

Aaron Smith at Economy.com also said the strong figure is misleading and does not portend a positive outlook.

"The better-than-expected outcome overall does not change our view that the economy is weakening, with the beneficial effects of rebate checks and foreign demand fading fast," Smith said.

The revised report reflected a strong upward revision in US exports and a more modest uptick in consumer spending, fueled by a massive tax rebate program. Foreign trade alone accounted for 3.10 percentage points in the overall growth rate, offsetting a major drag from the housing sector.

"For a recession the economy is certainly growing very quickly," said Avery Shenfeld, senior economist at CIBC World Markets.

"A lot of that growth is driven off exports and pessimists might say that can't continue during slowing growth overseas, but I would say this happened precisely during the period of slowing growth overseas ... this is still an economy that faces slow times but not a recession."

Citigroup economist Steven Wieting said it is hard to resolve the strong growth pace with rising unemployment.

"If the US economy were growing at its potential pace, the unemployment rate would not have risen a full percentage point over the past year," Wieting said, adding that the level of new jobless claims is "still recessionary."

Joel Naroff at Naroff Economic Advisors said the important question is what happens in the future.

"This was a surprisingly strong report that should end the discussion about a recession, at least for now," he said.

"But we are almost two-thirds of the way through the third quarter and the focus of attention is now on the future not the past. That does not look to be quite as good as what we had in the spring but not terrible either ... if we can only get housing prices in the weakest areas to start stabilizing, we could get the financial sector back on board and growth could pick up."

Consumer spending, the largest component of economic activity, was up a modest 1.7 percent, just 0.2 points more than previously estimated, despite a massive $168-billion government stimulus package that sent out tax rebates to tens of millions of people.

The main drag on growth remained the housing sector, with investment in residential property slumping 15.7 percent, not as bad as the 25.1 percent slide in the first quarter.

Despite the strong report, many analysts expect the current growth pace to slow since consumer spending is sluggish and a rebound in the dollar may curb growth in exports.

"There are already some signs that the impact of the tax rebates is starting to wane going into the third quarter and expectations that it will be totally spent by the fourth quarter," said Paul Ferley, economist at RBC Capital Markets.

"The support to exports from the earlier depreciation of the US dollar may be more long-lived, although the greenback is starting to trend higher. More worrying on the trade front near-term are indications of weakening growth overseas."

Ferley said the uncertain outlook for growth will keep the Federal Reserve on the sidelines with "a still-stimulative 2.0 percent Fed funds rate" until mid-2009.

Peter Kretzmer, an economist at Bank of America, agreed: "With economies abroad slowing and the one-time impact of tax rebates dissipating, we expect annualized economic growth to recede to near 1.0 percent in the third quarter and to maintain this pace into early 2009 before gradually improving."