Hurricane Irene arrived in earnest early Sunday, pummeling the New Jersey coast and driving storm surges up the rivers and along the coast from New York City up to Massachusetts.

The storm weakened slightly before making its second landfall in New Jersey early Sunday, and as wind-speeds dropped it was downgraded from a Category 1 hurricane to a tropical storm before hitting New York. Nonetheless, the storm packed a wallop, and by early Sunday, the combination of heavy rains, wind and near-high tides had begun to drive the Hudson and East Rivers over their banks in New York City.

New Jersey also saw extensive flooding, as did the Connecticut shoreline. Late Sunday afternoon, the tropical storm had passed north through New York and into Massachusetts.

Power outages were extensive in the northeast, but some local officials were pleasantly surprised to see the storm exacting less damage than was feared.

"Things look better than we anticipated," a New York City spokesman told The New York Times.

Back in Irene's wake, there was significant cleanup to do. More than 1 million people were without power in the greater Washington, D.C., area, The Washington Post reported.

A similar number were without electricity in North Carolina, site of the storm's first landfall, and where at least seven deaths have been attributed to the hurricane.

Hurricane Irene churned across New York and into Connecticut early Sunday, with wind gusts as high as 75 miles per hour.

9:18 a.m.: Just after nine, as it churns through New York, Hurricane Irene has been downgraded to a tropical storm. States in the storm's path were still anticipating flooding and strong wind gusts.

After the storm, a lot of water remains. Flood concerns persist into southern New England, while down in Virginia Beach, there is drying-out to do.

Update 1:05 p.m.: Tropical Storm Irene is now churning through Massachusetts, as people in its wake assess the damage. "Patches of blue sky" are visible again in New York City, according to ABC News. But damage is extensive, including significant flooding in rivers in New Jersey and along the shoreline in Connecticut and Southern New England. 

New York and other northeastern areas caught one big break. As The Times reports, Irene moved more quickly than expected, and some of the most driving rains occurred before the morning's high tide, which officials had feared would cause even more severe flooding, including in New York City. Nonetheless, recovery will be slow.

New York Gov. Andrew Cuomo told The Times that he could not yet predict when the Metropolitan Transportation Authority would resume operations, and millions of customers along the east coast remained without electricity Sunday afternoon.

The cost of all that needed cleanup? Potentially "tens of billions" according to AFP, citing the damage estimate of New Jersey Gov. Chris Christie. That estimate includes both real property damages and lost economic activity caused by the storm. At midday, 11 reported deaths had been linked to the storm.

[That "tens of billions" estimate may be overblown. The AP puts insured losses between $2 billion and $3 billion, and total losses at around $7 billion, citing a report by the firm Kinetic Analysis.]

Update 1:47 p.m.: About that New York MTA shutdown. The Times now reports that it could be a "lengthy" recovery for the transit system. The system is currently "paralyzed," to use The Times' word, and MTA officials have yet to even examine its 13 underwater subway tunnels for damage.

Update 4:29 p.m.: A word from FEMA Administrator Craig Fugate: "I don't think you can say we dodged a bullet."