Highlights
In a report free of special factors and pointing clearly to severe contraction in the labor market, initial jobless claims rose 3,000 in the Jan. 24 week to 588,000. The prior week was revised slightly lower to 585,000. The four-week average jumped 24,500 to 542,500.

Continuing claims show special weakness and indicate that the unemployed are not finding work. Continuing claims for the Jan. 17 week, the most recent data available, jumped 159,000 to a record 4.776 million. A comparison with mid-December shows a 404,000 gain for continuing claims.

Following this data, economists will begin issuing expectations for the January employment report which is not likely to show any improvement from the severely depressed readings of recent months. Markets showed no significant reaction to this morning's data.

Market Consensus Before Announcement
Initial jobless claims for the January 17 week surged 62,000 to 589,000, up from 527,000 in the prior week. The 589,000 level was matched once in December but otherwise is the highest since the early 1980s. Yes, initial claims clearly are at recessionary heights. But the picture for continuing claims has been worsening even more. Continuing claims for the January 10 week rose 97,000 to 4.607 million.

Jobless Claims Consensus Forecast for 1/24/08: 575,000
Range: 540,000 to 650,000