Initial Claims Unexpectedly Rise to 480,000

From the Department of Labor:

In the week ending Jan. 30, the advance figure for seasonally adjusted initial claims was 480,000, an increase of 8,000 from the previous week's revised figure of 472,000. The 4-week moving average was 468,750, an increase of 11,750 from the previous week's revised average of 457,000.

Forecasts were for initial claims to decline to 455,000. While continuing claims were flat, extended unemployment claims rose by 242,000 to 5.86 million. The nature of this economic downturn is different from previous downturns since those who are unemployed are staying unemployed. The conditions seem to be ripe for the long-awaited double dip.

The 4-week moving average rose to 468,750, and has now risen for a third straight week, reversing a multi-month downward trend. Look for weakness in the labor market to be reflected in continued weakness in consumer spending and broadly in our economy.