Highlights
Expectations will now start to build for January payrolls and another month of steep contraction looks to be in store. Initial unemployment claims for the Jan. 17 week surged 62,000 to 589,000 vs. 527,000 in the prior week (524,000 first reported). The 589,000 level, matched once in December and the highest since the early 80s, is consistent with significant recession.

Initial claims are negative but continuing claims show even more trouble, indicating that the jobless are not finding work. Continuing claims for the Jan. 10 week rose 97,000 to 4.607 million, driving the 4-week average 59,000 higher to 4.560 million for a high that again goes back to the early 80s.

There were no special factors affecting today's report, a report that points squarely at deep job losses. The data, together with steep losses in housing starts also released at 8:30 ET, won't support any new gains in the stock market today.

Market Consensus Before Announcement
Initial jobless claims appear to have gotten past the usual wide swings during the shortened holiday weeks. Initial claims and continuing claims moved toward their 4-week averages, giving a cleaner perspective on a weak jobs market. Initial claims rose 54,000 in the January 10 week to 524,000 from 470,000 in the prior week Now that the depth of the recession has sunk in on management, will layoffs accelerate in the first quarter?

Jobless Claims Consensus Forecast for 1/17/08: 610,000
Range: 500,000 to 680,000