SF Fed economist sees longest recession since WW2

CHICAGO, Dec 23 (Reuters) - The United States will likely emerge from recession in the third quarter of 2009 after enduring an 18-month downturn, the longest since World War Two, according to an economist at the San Francisco Federal Reserve Bank.

Simon Kwan, a vice president at the San Francisco Fed, said in the bank's latest "FedViews" newsletter, posted on Tuesday, that U.S. real gross domestic product will decline by more than 4 percent in both the fourth quarter of 2008 and first quarter of 2009.

The U.S. jobless rate could rise by 4 percentage points from its trough of 4.4 percent in March 2007, Kwan said. That suggests peak unemployment of about 8.4 percent versus the current 6.7 percent rate.

Inflation was forecast to fall quickly, with the core PCE price index slipping toward 1 percent by late 2009, Kwan said. (Editing by Tom Hals)