"Short and shallow."

That's the way Jerry Jordan, chief economist for Los Angeles-based First Interstate Bancorp., describes the length and depth of the current economic recession. . . provided, that is, that the Persian Gulf crisis is resolved in the next few months without major damage to Middle East oil fields.Given that happy scenario, Jordan expects oil prices to return to around $20 a barrel next year and the Federal Reserve to pursue a "somewhat more expansive" monetary policy.

But if the current standoff between Iraq and the United Nations should escalate into a shooting war, with major damage to gulf oil fields, then all bets are off, Jordan indicated.

"If the worst should happen, we can expect that gross national product would decline sharply while unemployment would rise. Inflation also would increase and interest rates would climb rapidly."

Jordan was the keynote speaker Tuesday at First Interstate Bank of Utah's annual Christmas luncheon and economic forecast at the Marriott Hotel. He told several hundred business and civic leaders that if war is avoided, better times will be here by next spring.

"This slump should be short and shallow. The weakness in the economy prior to Iraq's invasion of Kuwait was aggravated by the impact of the Middle East crisis on household purchasing power and on consumer and business confidence. The crisis also limited the Federal Reserve's latitude for easing credit."

But, just as the downturn should be mild, the expansion following it next year should also be moderate, Jordan said.

First Interstate predicts housing and autos will begin to pick up steam in 1991 with capital spending by businesses coming on stronger toward the end of the year. Commercial construction will continue to decline through the year, but exports should expand. Retail sales are expected to show moderate growth.

Because of soaring oil prices this year, 1990 will end with an inflation rate of 6 percent, the largest rise since 1981, said Jordan. Next year, again assuming no war, that figure should fall to 4 percent.

Lower inflation and slower growth should also combine to force down interest rates, he said, predicting fixed, 30-year mortgage rates will remain below 10 percent throughout 1991.

Jordan pointed out that Utah is currently creating new jobs at a 4.5 percent annual rate, second only to Nevada nationwide and more than double the national average. But slow growth nationally will hold the Utah economy to about 3.2 percent job growth in 1991, he predicted.

Personal income growth in Utah next year should fall to just under 7 percent, he said, about 1 percent better than the nation as a whole.