Loan Interest Rates: Forecasting and Finding Trends

By forecasting and finding trends in loan interest rates, you can prepare for economic change.  Fortunately, the information you need to find these trends is publicly available. 

What You'll Need

The statistics which affect loan interest rates the most are the "Gross Domestic Product," or GDP, which measures the amount of goods or services produced in the United States; the "Consumer Price Index," or CPI, which measures the average price for different items; and national payroll and unemployment rates.  Most newspapers carry articles about each of these reports when they are released each month, or you can check with the Bureau of Economic Analysis ( and the Bureau of Labor Statistics (

Step 1 - Check the Numbers

Check if any of these figures have changed from month to month.  Some slight changes are normal - for example, payroll rates usually rise during the holiday season.  But a larger-than-average increase or decrease indicates an overall economic trend which could affect loan interest rates.

Step 2 - Track the Changes

Increases in most of these figures indicate possible inflation.  If a trend towards inflation continues, usually the government steps in to raise interest rates to slow things down.  So a large increase in the GNP and the CPI could indicate that loan interest rates may rise as well.  On the other hand, if these figures are falling, that could indicate a recession - and a possible future decrease in interest rates.  The only exception is with the national unemployment rate - the unemployment rate falls during inflation and grows with recession, so a falling unemployment rate could point to a future rise in interest rates.

Step 3 - Be Patient

One months' figures are not enough.  Only by following the changes over a period of several months can you accurately predict any developing trends. 

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