Deposit rates tend to fall when unemployment rates are high, according to an analysis that looked at trends over the past 10 years.
Research firm Market Rates Insight tracked data from August 2001 to July 2010 and found that 65% of the decrease or increase in deposit interest rates can be attributed to fluctuations in the unemployment rate. The study showed that when the unemployment rate is high, deposit rates are low and vice versa.
The number of U.S. workers filing new claims for unemployment benefits rose last month to the highest level in nine months, according to San Anselmo, Calif.-based MRI, 12,000 to 500,000.
"Historically, the Fed did not increase the funds rate during high unemployment periods," said Dan Geller, executive vice president at MRI, "and therefore, only when we see the unemployment rate starts to decline, it will be a sign that interest rates on deposits are about to go up."