(Reuters) - Too much of the recent growth in employment has been concentrated in low-wage and temporary jobs, leaving the recovery on shaky ground, a top Federal Reserve official said on Friday.

Sarah Raskin, a member of the Fed's board of governors, said monetary policymakers are doing all they can to promote stronger economic growth and beef up hiring, and cited improving labor market conditions. But she added interest rates are a blunt tool that cannot help direct the types of jobs that are created, noting one quarter of workers are now considered low-wage.

Pointing to a sharp post-recession rise in poverty, a subject not often the focus of speeches by Fed officials, Raskin also argued the rise of temporary employment, which she said is approaching a record, was further widening an already large gap between rich and poor Americans.

"Our country cannot achieve prosperity without addressing the powerful undertow created by flat wages and tenuous financial security for so many millions of Americans," Raskin said in remarks to the National Community Reinvestment Coalition's annual conference.

"Government policymakers need to focus seriously on (these) problems, not simply because of notions of fairness and justice, (but) because the economy's ability to produce a stable quality of living for millions of people is at stake," she said.

The economy generated 236,000 jobs in February, bringing the jobless rate down to 7.7 percent from 7.9 percent. Still, total employment is still 3 million jobs short of its 2008 peaks, even before accounting for population growth.

The Fed at its policy meeting this week decided to maintain its monthly purchases of $85 billion in mortgage and Treasury securities for the foreseeable future. It has vowed to continue buying assets until it sees palpable improvement in the job market.

Raskin acknowledged progress was slow, but said the policy was having a positive effect.

"Both anecdotal evidence and a wide range of economic indicators show that these attempts are working to strengthen the recovery and that the labor market is improving," she said.

In response to the financial crisis and deep recession of 2007-2009, the Fed cut interest rates to effectively zero and more than tripled its balance sheet to over $3 trillion.

The U.S. economy has been showing signs of strength at the start of this year despite sharp government spending cuts that many analysts worry could thwart the expansion. The Fed said this week it sees U.S. growth averaging between 2.3 percent and 2.8 percent in 2013.

Still, the crisis in Cyprus, which again threatened the euro zone's banking sector and its economy, serves as a reminder of heightened global financial risks that might hurt the United States.

(Editing by Andrea Ricci)