Echoing comments from Federal Reserve Chairman Ben Bernanke on Wednesday, Cleveland’s regional Fed President Sandra Pianalto said economic recovery could be slower than expected.

"Once the recession ends, we may be tempted to hope that the economy will take off at a full gallop, but that is not likely to happen because of some long-standing imbalances within our economy," Pianalto said to the INVESTKentucky conference on Thursday.

Bernanke stressed that businesses will be cautious to hire even once economic growth resumes, noting that a quick recovery simply cannot take place until the unemployment rate falls. Pianalto added that Americans’ recent loss of household wealth is turning the United States into a nation of savers, which could be good for the long-term, but in short-term is slows recovery.

"As people come to grips with the fact that their finances are more uncertain than they had ever thought they would be, they are not likely to resume spending at the pace they once did," she said. “We should not expect consumer spending to return to the 70 percent share of GDP that it posted just before the recession began.” 

Like Bernanke, Pianalto also voiced concerns about the growing fiscal imbalance.

“For years, we have been able to finance a large share of our budget deficits with relatively cheap capital from abroad, and for years this has worked to our benefit. But our country should not regard international capital markets as a bottomless well,” she said. “As access to this well becomes more limited, the cost of financing our fiscal deficits could rise.”

Speaking about the labor market, Pianalto said “the jobless rate is likely to stay elevated for quite some time.” Moreover, she said some of the losses were not merely cyclical “but the result of structural shifts” in the economy.

“Given the glut of housing in many markets, it is hard to imagine employment in the construction industry making a quick return to its peak levels of 2006,” she said. “Even when the economy resumes a more normal growth rate, many laid-off workers will need to find jobs in new business sectors because their former industry has simply become a smaller part of our economy.”

Pianalto is not a voting member on the FOMC.