Dual mandate in rural America: Cook on jobs, prices and credit

The news

Federal Reserve Governor Lisa Cook assessed the dual mandate in rural America on September 30, in remarks at the 2026 Investing in Rural America Conference in Asheville, North Carolina, hosted by the Richmond Fed. It was the first year the conference was national in scope and organized jointly by all 12 Reserve Banks and the Board. She also reiterated her vote for the September rate increase.

Key takeaways:

• Rural unemployment has generally been close to the national rate, but rural areas have a smaller share of adults in the labor force, and job creation over the last four years has tilted toward urban areas.
• Transportation accounts for about a fourth of rural household expenses against less than a fifth for urban households.
• There are about 4.3 million small businesses in rural America, more than 96 percent of rural establishments, employing 7.4 million people.
• Cook said inflation has exceeded the Fed’s 2 percent target for more than five years and that she is committed to returning it to target while preserving labor market strength.

Our analysis

Cook framed the speech around the two halves of the Fed’s mandate. On employment, she said the nationwide labor market is largely stable, with low unemployment, low claims and employment gains that trended up over the summer after more modest hiring in recent years. Rural communities account for roughly 20 million workers, about 1 in 8 American workers. Even among those aged 25 to 54, the employment-to-population ratio in rural communities is several points lower, which she partly attributed to lower participation among working-age men.

On inflation, the picture is similar to the national one with differences. Before the pandemic rural inflation ran below urban, but it rose faster during the early recovery. Cook named energy and housing. Longer distances to work and services raise the weight of transportation, and housing costs rose faster outside big cities. Home values in nonmetro counties, smaller metro areas and low-density suburbs rose about 36 percent from March 2020 to March 2023, compared with 21 percent in the densest urban counties, according to research she cited. Counties with a high share of vacation and second homes saw prices rise 47 percent in the three years after the pandemic, which pressures long-time residents and seasonal workers. Since 2023, rural housing inflation has reverted toward pre-pandemic patterns, though housing remains a driver of total inflation.

On small business, she argued that rural residents are highly entrepreneurial, with a larger share of people self-employed than in urban areas. In the latest Small Business Credit Survey, 30 percent of these rural small businesses are less than three years old. Nationally, new firms were 9 percent of all small businesses in 2023 but accounted for 24 percent of job creation.

The final section reviewed the Fed’s work: Reserve Bank research on small businesses after Hurricane Helene, Minneapolis Fed research on Native community development financial institutions, a book called Investing in Rural Prosperity, an April 2026 convening on rural investment and Richmond’s Community Investment Training program, whose third cohort has recently begun.

For readers following policy, the sentence that matters is her statement on rates. She said she voted with the rest of the FOMC for the quarter-point increase in September and that inflation has been too high for too long.

Room for disagreement

Cook’s data show rural labor markets moving with the nation’s, which complicates any argument that monetary policy should be tailored to rural conditions. The Fed sets one policy rate for the whole country, and her speech presents the rural differences as context to understand, not as a case for a different policy.

Some of the rural indicators also look mixed. Unemployment has stayed close to the national rate, but participation and employment rates are lower, and job creation has lagged. One could read those as signs of weak demand for rural labor or as the product of demographics and social factors she mentioned, such as lower participation among working-age men. The speech offers both explanations without deciding between them.

What to watch

• Reserve Bank research on rural conditions, including the Richmond Fed’s work on recovery after Hurricane Helene.
• Whether rural housing inflation keeps tracking pre-pandemic patterns, as it has since 2023, and how energy costs weigh on rural households.
• Small Business Credit Survey results on firm age and credit access.
• The FOMC’s next steps on rates, given her stated commitment to returning inflation to 2 percent while preserving the strength in the labor market.