But Gutierrez said the impact of the housing crisis, which took a heavy toll on growth in the latter part of 2007, could last "a couple of quarters" before recovery "to a growth rate more akin to what we have been having over the last several years".
"In the first half of the year we will see a lower growth rate ... but our growth should pick up in the second half of 2008," Gutierrez told Reuters in Amman. Gutierrez said the economy, which grew last year at 2.2 %, the slowest pace in five years, would continue to grow despite the downturn.
"While we go through this correction we will see a slower rate of GDP growth but we will continue to see GDP growth ... our economy is strong. We will get through this correction the way we got through many others," he said. US growth slackened to a 0.6% annualised pace in the final three months of the year and many economists fear the country is being dragged into a recession by the slumping housing market, that has sparked a global credit crunch.
Gutierrez said a government stimulus package of over $150 billion approved by Congress was designed to "be temporary, quick and impactful to keep the economy moving while we go through this housing correction". Less affected segments of the economy would ease the impact of the crisis in the housing sector on growth. "Our economy is so large and diverse that we have a lot of segments that can offset when one segment is going through a correction ... you cannot really point to one area and say that's what we are going to use to drive growth," he said.
Gutierrez cited positive factors such as latest unemployment figures, resilient exports and continued business investment and healthy non-residential housing construction. "Our last reading of unemployment was 4.9%. That's below the average of each of the past three decades," he said. A US export boom encouraged by free trade deals and relentless efforts to open up new markets for US products by "getting rid of barriers was now paying off and helped growth", he added.
The fall in residential construction spending, which was 16.9 % over course of the full year, marking the worst annual performance since 1982, was being tempered by growth in commercial and industrial construction, Gutierrez said. "Interestingly non-residential construction has been almost offsetting and in some quarters has offset residential construction," he said.
But the slowdown in the "next couple of quarters" in consumer spending, which fuels more than two thirds of the US economy, could adversely hurt foreign enterprises investing in the US market, he warned.
" Around 70% of our GDP is driven by consumer spending ... So if our economies decline and our consumer spending declines that could impact of course exports to the US and businesses that are doing transactions in the US. That could impact how investments perform in the short-term," he said.
Ultimately recovery was underpinned by fundamentals of a large and diverse economy, the senior US official said. "We are talking about something short-term ... this is a correction ... and we will get through because we have a very strong, large, diverse and resilient economy. We have had very difficult shocks to our economy but we have always recovered and continued to grow," Gutierrez said.