The U.S. economy grew a meager 1.7 percent in the second quarter, with household finances weak and a labor market that continues to limp along, but recovery could come in the next several years and come back stronger than many anticipate, said Roger Altman, founder of Evercore Partners and former Deputy Treasury Secretary.

The economy has become more streamlined, while the banking sector shows signs of strengthening, and when the economy gains steam, it will have the potential to take off running faster than once thought.

“[I]t is possible that the U.S. economy will surprise on the upside. A housing revival, the revolution occurring in energy, a rejuvenated banking system and a leaner industrial base could lead to U.S. growth beyond the 2.5 percent rate that is widely seen as its long-term potential,” Altman wrote in a Financial Times opinion piece.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.  

“In other words, the famine could be followed by a feast.”

Housing, the sector of the economy that threw the country into recession and lags on recovery today, is improving, as prices are rising and groundbreaking on new homes is picking up.

Meanwhile, the country will develop massive oil and gas reserves in states such as North Dakota and contribute to growing energy and petrochemical sectors.

In addition, the banking system continues to improve, with capital and liquidity strengthening to levels not seen in decades, while the country’s industries have become much more streamlined and competitive, even against low-cost competitors in China.

Furthermore, the country will likely make progress tackling debt and deficit issues.

“Many leading economists would challenge this surge theory. They foresee another decade of continued headwinds and mediocre growth,” Altman wrote.

“That may be the mainstream forecast but an alternative, better scenario is coming into view.”

Consumers, meanwhile, are showing a little more optimism in today’s economy, though they still remain uneasy over the country’s future.

The Thomson Reuters/University of Michigan’s final reading on overall consumer sentiment for August rose to 74.3, its highest since May, Reuters reported.

Consumers have been paying down debts and now feel better about their financial health.

“Rather than citing income changes, consumers were more likely to cite favorable shifts in the amount of their outstanding debt and the value of their assets,” survey director Richard Curtin said in a statement.

Still, consumers still remain concerned over the economy’s future.

The survey’s gauge of consumer expectations fell to 65.1 from 65.6, the lowest level since December of 2001.

“These improvements, however, did not extend into the future, as their financial prospects for the year ahead remained unchanged at negative levels,” Curtin said.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.