That's up 31,000 from the week before, leading to a flurry of dour headlines. However, the overall trend for the past month, as reflected by a four-week moving average, is still gradually improving. The average rate of new unemployment claims over four weeks was 467,500, down 1,500 from the week before.
Still, the unexpected rise dampens some of the enthusiasm generated by last month's decline in the unemployment rate, which fell to 9.7 percent for January, and casts doubt on a near term housing market recovery.
The number of new unemployment claims continues to wobble close to the rate that economists call equilibrium -- that's a seasonally adjusted rate of 450,000 initial claims a week. But the important thing is the long term trend. Overall, the seasonally adjusted rate of initial claims has been falling towards equilibrium for almost a year -- from more than 650,000 in March to less than 550,000 in September to just under 500,000 by December, according to the Dept. of Labor.
So where is the unemployment going? The Obama Administration is hedging its bets, predicting unemployment will rise again to average 10 percent for the whole year, according to its Economic Report of the President, released February 10.