Washington has been tracking the balloon since it entered US airspace a couple of days ago, including by observing it with manned US military aircraft.
US Defense Secretary Lloyd Austin, while traveling to the Philippines, convened a meeting of senior Pentagon officials on Wednesday to discuss the balloon incident.
US military leaders considered shooting down the balloon over Montana but eventually recommended President Joe Biden against it because of the potential safety risk from debris, the official told reporters.
The official said the current flight path would carry the balloon over a number of sensitive sites, but did not give details.
Malmstrom Air Force Base in Montana is home to 150 intercontinental ballistic missile silos.
Officials declined to say how high the balloon was flying but acknowledged it was operating above civilian air traffic and below “outer space.”
US officials brought up the issue with their Chinese counterparts.
“We have communicated to them the seriousness with which we take this issue,” the official added.
The Chinese embassy in Washington did not immediately respond to a request for comment.
Spy balloons have flown over the United States several times in recent years, but this balloon appeared to be lingering longer than in previous instances, the official said.
“Currently, we assess that this balloon has limited additive value from an intelligence collection perspective, but we are taking steps nevertheless to protect against foreign intelligence collection of sensitive information,” the official said.