Federal Reserve Governor Lisa D. Cook discussed the economic conditions facing rural communities, including employment, inflation and small-business activity, during a speech at the 2026 Investing in Rural America Conference hosted by the Federal Reserve Bank of Richmond in Asheville, North Carolina, on September 30, 2026.

Source: https://www.federalreserve.gov/newsevents/speech/cook20260930a.htm

Cook said the conference was being held nationally for the first time, with all 12 Federal Reserve Banks and the Board of Governors participating in its organization. She thanked Richmond Fed President Barkin, the Richmond Fed and their Federal Reserve System partners for organizing the event.

Cook, who spent part of her childhood in North Carolina and grew up in Milledgeville, Georgia, said rural communities were important to her as a policymaker, economist and individual. She also expressed support for residents of Asheville and western North Carolina as they continued recovering from Hurricane Helene.

As a Federal Reserve governor, Cook said her responsibility was to help achieve maximum employment and stable prices for all Americans, including those living in rural communities. She said rural areas provide critical resources to the U.S. economy, including food, energy and materials used to build homes.

Rural communities also contribute to regional supply chains for furniture, motor vehicles, electronics, paper, plastics and rubber products. Cook said small businesses in these and other industries serve as important employers and sources of innovation.

Rural employment and inflation

Cook said labor-market conditions in rural communities were broadly similar to those in much of the country, although important differences remained. Nationwide, the labor market was largely stable, unemployment was low by historical standards and new claims for unemployment benefits—a proxy for layoffs—continued to trend at low levels. Hiring had been more modest in recent years than earlier in the expansion, although employment gains had increased over the summer months.

Rural communities account for roughly 20 million workers, or about one in eight American workers. Cook said the rural unemployment rate had generally remained close to the national rate. During the pandemic, however, unemployment in rural communities rose less sharply and recovered more quickly than the national rate.

A more significant difference between rural and urban areas was labor-force participation. Rural communities had a smaller share of adults participating in the labor force, partly because of demographic factors. Even among people aged 25 to 54, the employment-to-population ratio in rural communities was several percentage points lower. Cook said the difference partly reflected lower labor-force participation among working-age men because of economic and social factors.

Job creation in rural communities had also been slower than in urban areas. Rural job losses during the pandemic were somewhat less severe, and job growth was slightly stronger during the initial recovery. Over the roughly four years that followed, however, job creation had shifted toward urban areas.

Cook said rural inflation had broadly followed national trends but also differed in several ways. In the year before the pandemic, inflation in rural communities was somewhat lower than in urban areas. During the early pandemic recovery, the cost of living in rural areas increased faster than in urban areas, with energy and housing costs playing important roles.

Energy costs can weigh more heavily on rural households because residents may travel farther for employment and services. Transportation accounts for about one-fourth of all expenses for rural households, compared with less than one-fifth for urban households, according to the Federal Reserve Bank of New York’s Economic Heterogeneity Indicators—National report.

Housing costs also rose more rapidly in rural and lower-density areas than in cities during and in the first years after the pandemic. Between March 2020 and March 2023, home values in nonmetro counties, smaller metropolitan areas and low-density suburbs of large metropolitan areas increased by about 36 percent, compared with 21 percent in the densest urban counties, according to research from Harvard University’s Joint Center for Housing Studies.

Cook attributed the shift to increased remote work and the desire of many families for additional space. Higher home values likely also put upward pressure on rents in rural and less-dense areas. Since 2023, housing inflation in rural areas has moved back toward pre-pandemic patterns, although housing costs remain a significant contributor to overall inflation.

Vacation properties and second homes also became more valuable during the pandemic, an outcome particularly relevant to Asheville and other tourism-dependent rural areas. Research from Harvard’s Joint Center for Housing Studies found that counties with a high share of vacation and second homes experienced a 47 percent increase in home prices during the three years after the pandemic. Cook said those increases could place pressure on long-time residents and seasonal workers seeking housing.

Cook said inflation had remained too high for too long in both rural and urban areas. National inflation had exceeded the Federal Reserve’s 2 percent target for more than five years. She said she had voted with the rest of the Federal Open Market Committee to raise interest rates by 25 basis points at its recent September meeting and remained committed to returning inflation to the Federal Reserve’s objective while preserving labor-market strength.

Small businesses in rural America

Cook identified small businesses and entrepreneurs as another essential part of the rural economy. She said the subject was particularly relevant to her because she had long researched innovation and entrepreneurship.

Approximately 4.3 million small businesses operate across rural America, representing more than 96 percent of all rural establishments. Those businesses employ 7.4 million people in rural communities, according to the U.S. Small Business Administration’s Office of Advocacy.

Cook said research and her own experience indicated that rural residents were highly entrepreneurial. A larger share of people in rural areas are self-employed than in urban areas. The Federal Reserve’s latest Small Business Credit Survey found that 30 percent of rural small businesses were less than three years old, indicating a mix of younger startups and older, established businesses.

That mix is significant because new businesses account for a disproportionately large share of gross job creation by small businesses. In 2023, new firms represented 9 percent of all small businesses nationwide but accounted for 24 percent of job creation. Gross job creation refers to jobs created by entering and expanding establishments, according to data from the Census Bureau’s Business Dynamics Statistics.

Cook said the presence of new and innovative small businesses in rural communities was consistent with research showing that rural regions with a higher concentration of innovative businesses tend to record stronger employment and establishment growth.

Federal Reserve research and community engagement

Cook also outlined the Federal Reserve’s research and community-development work involving rural communities. Staff at the Board of Governors and each of the 12 Reserve Banks work on issues affecting rural areas, she said, and the Federal Reserve supports efforts to make rural communities places where small businesses, families and individuals can grow and thrive.

Cook said she paid close attention to the work because of her rural background and because she serves on the Board’s Committee on Consumer and Community Affairs and its Subcommittee on Smaller Regional and Community Banking.

Among the initiatives she highlighted was a project released by the Richmond Fed and Riverbird Research of the Asheville Area Chamber of Commerce. The publication examined how small businesses were faring after the flooding and storms associated with Hurricane Helene.

The Federal Reserve Bank of Minneapolis has also conducted research on the role of Native community development financial institutions, or CDFIs, in expanding credit access in tribal communities, particularly those in more remote rural areas. Cook said CDFIs had long been of interest to her and noted that she had served on the board of a CDFI before joining the Federal Reserve.

The Board of Governors and the Federal Reserve Bank of St. Louis previously published the book Investing in Rural Prosperity, which examined efforts involving entrepreneurship, homeownership, workforce development and other areas.

Community engagement is another component of the Federal Reserve’s rural-development work. In April 2026, the Board and six Reserve Banks hosted a forum that brought together participants from the public, private, nonprofit and philanthropic sectors. The event examined investment in rural communities and opportunities to improve the flow of capital to rural regions.

In November 2025, the Federal Reserve Bank of Philadelphia hosted a Rural Community Action Assembly focused on developing strong small-business networks that can support rural economies through innovation, job creation and local growth.

Cook also highlighted the Richmond Fed’s work in the Fifth District. The bank recently welcomed the third cohort to its Community Investment Training program. Participants learn how to develop investment-ready community-development proposals and connect with potential capital providers. Cook said western North Carolina had been well represented across all three cohorts.

She said meetings such as the Investing in Rural America conference allow participants to share research and ideas that can improve outcomes for Americans nationwide.

Rural communities’ economic role

Cook said rural communities had played multidimensional roles in the U.S. economy since the country’s founding and would continue to do so. She credited local, regional and national stakeholders with bringing expertise, connections and resources to help rural communities use their assets in new and productive ways.

She concluded by thanking participants for their work supporting rural America and for sharing their expertise. Cook said cooperation across sectors and levels of government could help sustain the vitality of rural communities across the country.

Notes and sources

1. Cook said the views expressed in the speech were her own and not necessarily those of her colleagues on the Federal Reserve Board or the Federal Open Market Committee.

2. Between 2001 and 2021, 53 percent of all personal income generated by the forestry and logging industry and 51 percent of farm income was earned in rural communities.

3. Andrew Dumont, “Changes in the U.S. Economy and Rural-Urban Employment Disparities,” FEDS Notes, Board of Governors of the Federal Reserve System, January 19, 2024:

4. Raji Chakrabarti, Natalia Emanuel, Thu Pham, Beck Pierce and Maxim Pinkovskiy, Economic Heterogeneity Indicators—National, Federal Reserve Bank of New York, April 2026:

5. Alexander Hermann and Peyton Whitney, “The Geography of Pandemic-Era Home Price Trends and the Implications for Affordability,” Harvard University Joint Center for Housing Studies, May 2024:

6. Alexander Hermann and Peyton Whitney, “Rural Housing Shift: Vacation Area Home Prices Surge Post-Pandemic,” Harvard University Joint Center for Housing Studies, December 2025:

7. U.S. Small Business Administration, Office of Advocacy, 2025 Small Business Profile: Rural Areas, August 2025. An establishment is a single physical location where business is conducted or services or industrial operations are performed. It is not necessarily identical to a company or enterprise, which may consist of one or more establishments.

8. Brian Thiede, Lillie Greiman, Stephan Weiler, Steven C. Beda and Tessa Conroy, “Six Charts that Illustrate the Divide between Rural and Urban America,” The Conversation, March 16, 2017.

9. Gross job creation refers to all jobs created by entering and expanding establishments. The data are from the Census Bureau’s Business Dynamics Statistics for 2023.

10. Tim Wojan and Timothy Parker, “Innovation in the Rural Nonfarm Economy: Its Effect on Job and Earnings Growth, 2010–2014,” Economic Research Report No. 238, U.S. Department of Agriculture, September 2017:

11. Bethany Greene, Anthony Tringali and Riverbird Research of the Asheville Area Chamber of Commerce, “How Small Businesses Are Faring in the Aftermath of Hurricane Helene,” Federal Reserve Bank of Richmond, Regional Matters, January 15, 2026:

12. Lisa D. Cook, “Growth and Change at Community Development Financial Institutions,” speech delivered at the Expanding Access to Capital for CDFIs event hosted by the Federal Reserve Bank of New York, New York, May 14, 2024.

13. Andrew Dumont and Daniel Paul Davis, eds., Investing in Rural Prosperity, Federal Reserve Bank of St. Louis and Board of Governors of the Federal Reserve System, 2021.

14. Board of Governors of the Federal Reserve System, “Strengthening America’s Economy through Rural Investment: A Working Forum,” April 14–15, 2026: https://www.federalreserve.gov/conferences/strengthening-americas-economy-through-rural-investment-forum.htm

15. Federal Reserve Bank of Philadelphia, “Rural Community Action Assembly: Sustaining Entrepreneurial Ecosystems,” November 19, 2025:

16. Federal Reserve Bank of Richmond, “Rural Investment Collaborative”: