Treasury rates started the week with yields rising on all maturities of one year or greater.  Three month and six month Treasuries held steady with interest rates of 0.14 and 0.21%, respectively.  The longer term Treasuries were no so steady, the one year Treasury rate moved up a modest one basis point to close at 0.40%.  The five year Treasury and the ten year Treasury each gained eight basis points with the yield on the five year reaching 1.46% and the ten year landing at 3.42%.

The big market news of the morning was retail sales.  The U.S. Census Bureau announced today that the estimate on U.S. retail and food services sales for August were at $351.4 billion.  That was an increase of 2.7%.  Nice numbers for a recovery.  But…

Retail sales are one of the statistics that you have to watch what figure the percentage change is based upon.  For retail sales, the headline percent change is month over month.  While retail sales were announced as up 2.7%, that is an increase from July of 2009.  The figure is actually 5.3% lower than August, 2008 sales.  Furthermore, total sales for the period June through August is down 7.6% from the same period last year.  Yes, this will help produce a positive GDP numbers that are announced as quarter to quarter percent changes but it is not likely to lead to increased employment.  2008 was a tough year for production and sales and 2009 is still measurably worse.  The positive figures are month to month and quarter to quarter, not year over year.

How does this play out for CD rates?  I don’t have a clue.  The biggest drag on bank rates continues to be Fed Funds rates at ~ 0.15% and the continued closing of banks by the FDIC.  Though the bank closings may be good for the economy the stressed banks tend to offer higher bank rates especially CD rates forcing competitors to keep rates higher.  Don’t despair just yet there are plenty of high CD rates to be had in various markets.  Compare the national bank CD rates and search by state to find the CD rate and term that suits your investment needs.

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