May 27 (Bloomberg) -- The U.S. government’s Aaa credit rating is stable “even with a significant deterioration” in the nation’s debt, Moody’s Investors Service said, signaling confidence in a rebound from the recession.

The U.S. rating is supported by “a diverse and resilient economy, strong government institutions, high per-capita income, and a central position in the global economy,” New York-based Moody’s said in a statement. At the same time, the firm warned that any “reassessment” of long-term growth prospects could put pressure on the rating.

Today’s announcement may help soothe concern among investors who sold U.S. assets in the aftermath of Standard & Poor’s cutting Britain’s rating outlook, spurring concern about a similar fate for the U.S. The Obama administration has committed to reining in the budget deficit once a recovery is under way.

“Clearly there’s no immediate danger here,” said Bob Bixby, executive director of the Concord Coalition, a budget watchdog group in Arlington, Virginia. “The threat is somewhere off in the future, that if we don’t do something to prove we have a sustainable fiscal path, the bond rating could be in danger.”

Dollar Remains Higher

Treasuries fell after Moody’s announcement, while the dollar remained higher. Yields on benchmark 10-year notes were at 3.67 percent at 2:40 p.m. in New York, and the dollar was up 0.4 percent at $1.3936 per euro.

Treasury Secretary Timothy Geithner, asked last week about U.S. creditworthiness, said the Obama administration is committed to cutting the deficit. In an interview with Bloomberg Television, he added that the target is reducing the gap to about 3 percent of gross domestic product, from a projected 12.9 percent this year.

Bill Gross, the co-chief investment officer of Pacific Investment Management Co., said May 21 the U.S. may eventually lose its top rating, as the government sells a record amount of debt this year to drag the economy out of the recession. The U.S. is likely to sell $3.25 trillion in debt in the year ending Sept. 30, according to economists at Goldman Sachs Group Inc.

S&P lowered the U.K.’s rating outlook to “negative” from “stable” last week, citing the nation’s soaring debt burden. The U.S.’s $11.2 trillion of debt is about 79 percent of the $14.1 trillion in gross domestic product, according to Bloomberg data. In the U.K., the debt-to-GDP ratio approaches 100 percent.

U.K. Contrast

S&P’s decision doesn’t signal a similar move for the U.S. will follow, said Moritz Kraemer, S&P’s head of sovereign ratings for Europe, Middle East and Africa.

“I want to make it very clear that the negative outlook on the U.K. is not a secret message to Washington,” Kraemer told reporters in Johannesburg today. “If we wanted to talk about the U.S. then we’d talk about the U.S.”

Long-term economic growth rates are determined by gains in productivity and in the size of the employed workforce. Moody’s said that American population growth will buttress the expansion of the U.S. economy, and expressed confidence in productivity gains.

The current recession, the worst in at least half a century, has “only temporarily altered America’s productivity dynamic,” Moody’s said.

“U.S. economic strength will emerge after the crisis without major impairment,” Moody’s Vice President Steven Hess, author of the report, said in the statement. “The global role of the U.S. currency also contributes to the ability of the economy and government finances to rebound.”

Hess also said that “a reassessment of the long-term growth prospects of the economy and the ability of the government to return to a sustainable debt trajectory could put negative pressure on the rating in the future.”

To contact the reporter on this story: Dakin Campbell in New York at dcampbell27@bloomberg.net; Matthew Benjamin in Washington at mbenjamin2@bloomberg.net

Last Updated: May 27, 2009 14:59 EDT