(Adds Pimco ratings comment, updates prices)

* Philadelphia Fed index improves less than expected

* Jobless rate forecast to reach double digits

* Hints US Triple-A credit rating could be on the line

By Ros Krasny

CHICAGO, May 21 (Reuters) - Data on Thursday underscored that the U.S. economic recovery, when it arrives, will be a long slog, with a key factory index showing only marginally less weakness and unemployment tipped to hit double-digit levels.

Financial markets were also slammed by suggestions of the unthinkable -- that the United States could lose its coveted triple-A credit rating.

The developments came a day after the Federal Reserve, in minutes released from its April policy meeting, said that a full U.S. recovery could take five or six years.

On Thursday, the Philadelphia Fed reported that its closely watched indicator of factory activity in the Mid-Atlantic region rose by a fraction in May, with the level of contraction more than markets had expected. Separately, an index of leading economic indicators for April managed its first increase in almost a year.