increases in activity and employment have been accompanied by very low inflation rates. the fall in oil prices has prompted declines in the general level of prices over much of the past year. yet core inflation, the indicator that excludes energy and fresh food prices, has moved on a rising course over the year. and while still at moderate levels, this indicator ’ s recent trajectory suggests the risks of entering an overly prolonged period of very low inflation have progressively been dispelled. while in july the overall price index posted growth of 0. 1 %, influenced by fuel prices, inflation at the end of the year is expected to be around 1 %. in any event, the still - high spare capacity in the economy presages a gradual recovery in inflation over the next two years. the factors underpinning the recovery the path of recovery of growth and employment has essentially been underpinned by the restoring of macroeconomic and financial equilibria, which were severely eroded in the crisis. progress has been visible in the correction of the external imbalance, the deleveraging of households and firms, the redressing of fiscal balances towards levels more compatible with the sustainability of public finances and the restructuring and consolidation of the banking sector. unemployment, too, is showing clear signs of a correction. the reforms undertaken within spain, along with the headway in economic and monetary union and the application of the highly expansionary monetary policy by the ecb, have proven key to restoring confidence and providing for the progressive absorption of the imbalances. by way of illustration, the proportion of spanish public debt held by nonresidents has risen from 30 % in 2012 to 44 % at present, an increase indicative of the improved confidence in our economy, but also of its dependence on the perception abroad of the soundness and continuity of our recovery. despite what has been achieved in growth, employment and restoring equilibria, we are far from having overcome all the factors of vulnerability. doubts over the continuity of the macroeconomic, fiscal and financial rebalancing drive might curtail and lead to backtracking from these achievements. we must not forget that the legacy of the crisis is still burdensome. our unemployment rate remains above 22 % ; households and firms are speedily reducing their high debt, but public debt as a proportion of gdp has increased by over 60 pp since 2007 ; and the economy ’ s financial dependence on the external sector remains high, with a net debtor position of close to

for release on delivery 6 : 45 p. m. est december 6, 2018 welcoming remarks by jerome h. powell chairman board of governors of the federal reserve system at the housing assistance council ’ s 2018 rural housing conference washington, d. c. december 6, 2018 thank you for the kind introduction, and thank you to the housing assistance council ( hac ) for inviting me to be part of this discussion of rural housing. i understand that you will shortly be presenting awards to people who are working at the local and national levels and in both the public and private sectors and whose efforts have improved housing conditions for the rural poor. all of you who work in these roles are doing your country a great service by helping to advance economic opportunity in our communities. i want to thank the award recipients for the difference you make in the lives of people in rural communities. i am happy to report that our economy is currently performing very well overall, with strong job creation and gradually rising wages. the unemployment rate is 3. 7 percent, the lowest since 1969. a strong job market has encouraged more people to participate in the labor market, another positive development. in fact, by many nationallevel measures, our labor market is very strong. as those at this conference are acutely aware, however, aggregate statistics can mask important variations between different demographic and income groups, as well as significant regional differences. for example, unemployment rates in some persistently poor rural counties remain much higher than the national figures. the annual average unemployment rate in 2017 exceeded 10 percent in 27 persistently poor rural counties, and the rate was 20 percent or more in 2 of those counties. recent fed research found that, since 2007, labor force participation rates for those in their prime working years in rural areas have increasingly lagged rates in urban areas. labor force participation has been particularly low for those with only a high school diploma or less. 1 research has alison weingarden ( 2017 ), “ labor market outcomes in metropolitan and non - metropolitan areas : signs of growing disparities, ” feds notes ( washington : board of governors of the federal reserve - 2also found that business formation and employment growth during the recovery have been concentrated in large urban areas. 2 data and research findings like these remind us that, despite positive trends in national data, the benefits of the ongoing economic expansion are still not reaching some communities. through the fed ’ s 12 reserve banks and their branches, we are able to get a clearer picture of conditions in