Updated from 10:43 am to add new text after the third paragraph.
WASHINGTON (AP) -- Federal Reserve Chair Janet Yellen says the Great Recession complicated the Fed's ability to assess the U.S. job market and made it harder to determine when to adjust interest rates.
Yellen's remarks to an annual Fed conference in Jackson Hole, Wyoming, offer no signal that she's altered her view that the economy still needs Fed support from ultra-low interest rates. The timing of a Fed rate increase remains unclear.
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She notes that while the unemployment rate has steadily declined, other gauges of the job market are harder to assess and may reflect continued weakness. These include high levels of people who have been unemployed for more than six months, many people working part time who would like full-time jobs, and weak pay growth.
Yellen repeated language the Fed has used at its last meeting that record-low short-term rates will likely remain appropriate for a "considerable time" after the Fed stops buying bonds to keep long-term rates down. The Fed's bond buying is set to end this fall.
But Yellen said the Fed's rate decisions will be dictated by how the economy performs.
"Monetary policy is not on a preset course," she said. The Fed "will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy."
Yellen also suggested that pay gains, which have been sluggish since the recession ended five years ago, could rise faster without necessarily igniting inflation.
John Silvia, chief economist at Wells Fargo, said Yellen's remarks confirmed his view that the Fed's first rate increase will occur next June.
"Yellen still wants more time to evaluate the data," he said.
Silvia also said the speech hints that the Fed is "willing to take a little more inflation to achieve their labor market goals." If inflation were to top the Fed's target of 2 percent, "I don't think they're going to panic."
Yellen delivered her remarks at the opening of the annual conference sponsored by the Kansas City Federal Reserve Bank at a lodge with a backdrop of the Grand Teton Mountains. This year's conference is devoted to the subject, "Re-evaluating Labor Market Dynamics" and Yellen's comments addressed the difficulty the Fed faces in trying to determine how much weakness remains in the job market given changes caused by the 2007-2009 recession.
She noted "considerable uncertainty about the level of employment consistent with" the Fed's goal of maximum employment and stable prices.
Paul Dales, senior U.S. economist at Capital Economics, wrote in a research note Friday that "despite the faster-than-expected decline in the unemployment rate, Yellen does not appear to have changed her view that there is still 'significant' slack in the labor market."
Yellen's comments came two days after release of the minutes of the Fed's July 29-30 meeting. Those minutes showed that officials engaged in an intensifying debate over whether to raise rates sooner than expected if the economy keeps strengthening.
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