CD Rate Trends This Week: Aug. 24

When it rains it pours.

But it’s not the weather worrying bank rate investors, it’s the steady downpour of low interest rates dragging certificate of deposit rates down to historically weak levels.

Get your umbrellas out again this week, as the bad weather for bank CD rates continues.

Right down the line, in all six of the key CD categories, rates fell for the week, as measured by the BankingMyWay Weekly CD Rate tracker. We’ll get to the numbers in a moment, but the economic issue du jour  that is keeping rates down - and there always seems to be one – is national unemployment.

According to the U.S. Deptartment of Labor, in the week ending Aug. 14, initial claims clipped the 500,000 levels, an increase of 12,000 from the previous week's revised figure of 488,000. The four-week moving average was 482,500, an increase of 8,000 from the previous week's revised average of 474,500.

It’s been a steady climb for the weekly U.S. jobless rate, which stood at 482,200 at the end of July. Clearly, instead of adding jobs, the private sector continues to shed them, and that’s bad news for not only the unemployed (and the soon-to-be-unemployed), but for bank deposit investors, too.

There is no shortage of key economic benchmarks that can influence bank interest rates, but unemployment figures are particularly important. If private companies aren’t adding jobs, or worse, are in fact cutting them, that tells central bankers that the economy remains mired in a ditch, as President Obama has referred to our national financial predicament.

We won’t get out of that ditch unless companies start hiring again, and the Federal Reserve and banks won’t start pushing rates until that begins to happen (especially with inflation off the Fed’s radar).

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