Recent improvement in the U.S. labor market has shortened the duration of the U.S. Federal Reserve's extended period of near-zero interest rates, but only by about three months, a San Francisco Fed economist said.

To try to blunt the effects of the Great Recession, the Fed lowered its target rate for overnight lending between banks to near zero in December 2008, and has promised to keep it there for an extended period.

With unemployment high and inflation below its informal 2 percent target, the U.S. central bank has sought to push borrowing costs even lower to stimulate the economy, and is on track to buy a total of $2.3 trillion in long-term debt securities by June.

Now, even with the labor market improving somewhat, the Fed's accommodative monetary policy continues to be warranted, San Francisco Fed associate research director Glenn Rudebusch wrote in a FedViews column dated Feb. 10 and available on the San Francisco Fed's website on Monday.

In general, he said, the Fed follows a policy rule of thumb that calls for lowering the target rate by 1.4 percentage point for each 1 percentage point decline in inflation, and by 1.8 percentage points for each 1 percentage point increase in unemployment.

The policy rule suggests little need to raise the funds rate target soon, he wrote.

The drop in unemployment rate, to 9 percent in January from 9.8 percent in November, was one of the steepest two-month declines on record, and suggests a lower unemployment rate over the next several years than earlier anticipated, he said.

But moderate labor costs will keep inflation down, he wrote: by the end of next year, overall and core inflation will be running at about 1 percent, he forecast.

Slack in the economy has damped overall U.S. consumer inflation despite recent jumps in commodity prices, Rudebusch wrote. The positive unemployment news since last October appears to have shortened the duration of the 'extended period' of near-zero interest rates by only about three months. (Reporting by Ann Saphir; Editing by Andrew Hay)