US Treasury Secretary Henry Paulson conceded today the US economy was being buffeted by "headwinds" but said the Bush administration has not yet decided whether it needs new stimulus measures.
"The economic data is mixed. We're watching this very closely," Mr Paulson said. "We're facing strong headwinds but the economy is going to continue to grow."
Pressed to say whether the White House will act to boost economic activity, Paulson would only say the issue was under consideration.
The US Treasury chief spent an hour on television offering his reassurances that growth would continue, but he was challenged by the head of the prestigious National Bureau of Economic Research (NBER) who said recession risks were rising.
"I think we're not in a recession now," said Martin Feldstein, a Harvard professor who heads the private-sector NBER that determines when recessions occur. He agreed with Mr Paulson that slow growth lies ahead but warned it might be so feeble that it does not continue.
"I think that for the next quarter or so that [slow growth] is the most likely outcome, but I think there is a serious risk that it could get worse than that and we could see an actual downturn," Mr Feldstein said.
Some type of fiscal stimulus is needed to avert a potential recession, Mr Feldstein said, along with more interest-rate cuts from the Federal Reserve.
The US central bank has cut benchmark overnight interest rates by a cumulative 1 percentage point to 4.25 per cent since mid-September and is expected to lower them again this month.