Federal Reserve chief Janet Yellen argued Monday that the US labor market remains slack and that Fed policy needs to stay focused on generating jobs.In the clearest delineation of her priorities since taking the helm of the central bank in February, Yellen said the steady fall in the official unemployment rate to 6.7 percent masks deep weaknesses in the jobs market.In a speech in Chicago, she pointed in particular to the high level of people unemployed for a long term, despite the rebound from the Great Recession."While there has been steady progress, there is also no doubt that the economy and the job market are not back to normal health," she said. "The recovery still feels like a recession to many Americans, and it also looks that way in some economic statistics."Yellen emphasized that even though the Fed has begun ratcheting down its huge bond purchase program, the slack in the labor market shows the economy still needs its support in the way of ultra-low interest rates and Fed programs for low-income communities.She pointed to a woman, Dorine Poole, who lost a job processing medical claims at the outset of the 2008 crash and, despite lengthy work experience, still cannot find a full time position."When employers started hiring again, two years of unemployment became a disqualification," Yellen said, pointing to a common problem of the post-recession period.She also cited another woman laid off from a printing plant with much experience who now has to work part-time serving food samples in a supermarket. For people like this, Yellen said, "the job market is tougher now than in any recession.""The numbers of people who have been trying to find work for more than six months or more than a year are much higher today than they ever were since records began decades ago."Overall, she said, the economy remains "still considerably short" of the Fed's goals of maximum sustainable employment and stable inflation.While inflation remains extraordinarily low and not a problem, she said the jobs market is a challenge, and that the Fed's aim is to bring the unemployment rate down to 5.2-5.6 percent.Addressing a current debate among economists and policy-makers, Yellen said some of the problem in fighting unemployment is "structural" -- that many of the unemployed do not have the right skills for today's economy.But if that were the main problem, she argued, there would likely be more of an inflation problem and the Fed's policy to encourage job creation via ultra-low interest rates would not have been as successful as it has been, pulling the rate down from 10 percent.Moreover, she said, the evidence of a high level of people in part-time jobs, a very low level of turnover in those employed, a low labor market participation rate and extremely low wage growth, all point to significant cyclical slack in the jobs market."Based on the evidence, my own view is that a significant amount of the decline in participation during the recovery is due to slack, another sign that help from the Fed can still be effective."