The U.S. labor market still is in a deep rut despite a recent drop in the unemployment rate, Cleveland Federal Reserve Bank President Sandra Pianalto said on Tuesday.
Unemployment rates have decline a bit recently, but job creation remains anemic, as businesses have been cautious in expanding their payrolls, Pianalto said in remarks to the Summa Hospitals Women's Board.
The country's jobless rate recently posted its biggest two-month drop in more than 50 years, slipping to 9.0 percent in January from 9.8 percent in November.
However, part of that decline was due to workers dropping out of the labor force and a separate government survey of company payrolls showed only 36,000 new jobs were added last month.
Pianalto, whose speech focused primarily on Ohio's economy, said she expected the nation's economic expansion, which registered a 3.2 percent annualized rate of growth in the fourth quarter, to remain moderate in 2011.
She cited strength in exports and manufacturing as reason for optimism, but added that the economy still faces significant headwinds, particularly from a downtrodden housing market and weak income growth.
A survey of homebuilders published on Tuesday showed sentiment in the sector remains severely depressed.
This recession was much deeper and lasted longer than previous recessions, and we have a long way to climb back, Pianalto said.