Rate watchers know the drill.

For certificate of deposit rates to rise, we need to see evidence of a sustained economic recovery. While much of the news has been upbeat so far in 2010, something inevitably comes along to undercut any good economic news, and thus keep CD rates low for yet another week or two.

That’s what happened during the past few weeks. Despite data indicating the U.S. jobs picture has leveled out, and despite news that pending home sales rose in February and March, the news from Europe has swamped the economic landscape. There, Greece’s overwhelming public debt picture has led to public riots and the near-ruination of that country’s economy (which still might happen if the European Commission’s austerity program isn’t enacted by the Greek government).

The anxiety over Greece is legitimate, and certainly isn’t good news for bank investors. Economists fear that Greece’s economic woes will spill over into nearby countries that engage in the same high public debt practices that Greece does. If the damage isn’t contained to Greece and spills over to the other countries, as is feared, then Europe could easily fall into a double-dip recession; a scenario that would threaten the many U.S. companies that do business in Europe and consequently keep the U.S. economy down.

The good news back here in the U.S. is that, despite the troubles on the Mediterranean, the economic picture is brightening. The U.S. Labor Department announced Friday that while the U.S. unemployment rate rose to 9.9% in April (from 9.7%) in March, employers did add 290,000 jobs (about 230,000 of them from the private sector — a good sign).

Meanwhile, the National Association of Realtors reports that pending homes sales posted a 5.3% uptick in March — that after an 8.3% rise in February. True, some of that activity can be linked to the homebuyer’s tax credit, which ended in April. But evidence that banks are loosening their purse strings and are lending again (especially with jumbo loans and loans on second homes) should keep the housing market on the right track.

One last piece of good news for the bank CD market — U.S. consumers are beginning to spend again, based on the March personal consumption expenditure index. The PCE rose 0.6% in March, following an 0.5% upswing in February. Both numbers suggest that the all-important U.S. consumer is growing increasingly confident in the U.S. economy again.

So where does all this leave the bank CD investor? In the middle of a tug-of-war between competing pieces of economic news, where neither side of the “good vs. bad” economic news is trumping the other. That status quo is keeping a lid on CD rates, and should continue to do so until the Greek tragedy in Europe fully plays out.

Unfortunately, it’s no longer just about obvious economic issues like jobs, housing and consumer spending. The looming shadow of economic disaster in Europe is taking center stage right now, and that hurts CD investors.

Here’s the fallout this week, as measured by the BankingMyWay Weekly CD Rate Tracker:

Description          This Week         Last Week

60-Month CD            2.112%           2.12%

48-Month CD            1.8%               1.814%

24-Month CD            1.218%           1.233%

12-Month CD            0.767%           0.772%

Six-Month CD            0.506%           0.513%

Three-Month CD       0.325%           0.329%

To get the best CD rates each week, no matter what the economic news, visit BankingMyWay CD Rate Search. It’s the most thorough review of bank CD rates in the market.

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