US president George W Bush said yesterday the US economy was going through a rough patch but could absorb shocks such as recession, war and corporate scandals.

"The genius of our system is that it can absorb such shocks and emerge even stronger," Mr Bush said before he signed a $168-billion (€115-billion), two-year economic stimulus package into law. Of that total, $152 billion is earmarked for 2008.

The plan marks a bet by the president and Congress that consumers will rapidly spend at least 40 per cent of the $300 to $1,200 tax rebates to be handed to them in May via the stimulus package.

If successful, the move could add up to three percentage points to US gross domestic product in the third quarter on an annualised basis, economists say - allowing the economy to spring back from the brink of recession.

January's employment report showed an unexpected loss of 17,000 jobs across the US economy, while the Institute for Supply Management's survey of the services industry also showed a surprising drop in business sentiment last month.

Fresh data from the commerce department yesterday disclosed that US retail sales rose unexpectedly last month, by 0.3 per cent, compared with forecasts of a 0.2 per cent drop. But economists said that underlying trends still showed consumers were increasingly holding off from shopping.