(RTTNews) - Reflecting continued weakness in the labor market, first-time claims for unemployment benefits unexpectedly jumped to their highest level in over twenty-six years in the week ended January 31st, according to a report released by the Labor Department on Thursday.

The report showed that initial jobless claims rose to 626,000 from the previous week’s revised figure of 591,000. With the increase, jobless claims rose to highest level since October of 1982, when jobless claims totaled 637,000.

Economists had expected jobless claims to edge down to 580,000 from the 588,000 originally reported for the previous week.

The Labor Department also said that the less volatile four-week moving average rose to 582,250 from the previous week’s revised average of 543,250. The four-week moving average also rose to a twenty-six year high, reaching the highest level since December of 1982.

Additionally, the report showed that continuing claims in the week ended January 24th rose to a new record high of 4.788 million from the preceding week’s revised level of 4.768 million.

Chris Low, Chief Economist at FTN Financial noted, “The disparity between initial claims below their all-time high and total claims above can be explained by the length of unemployment and by the fact that unemployment recipients can receive benefits for 52 weeks thanks to extensions.”

“Back in the early Eighties, claims were only paid for 26 weeks,” Low added.

The data is likely to add to recent concerns about the outlook for the labor market ahead of the release of the Labor Department’s monthly employment report on Friday.

Economists expect the report to show that payroll employment fell by about 500,000 jobs in January, marking the thirteenth consecutive month of job losses. The report is also expected to show that the unemployment rate rose to 7.5 percent from 7.2 percent in December.

On Wednesday, Automatic Data Processing, Inc. (ADP) released a report showing that private sector employment continued to decrease in the month of January, although the pace of job losses slowed compared to the previous month.

The report showed that non-farm private employment fell by 522,000 jobs in January following a revised decrease of 659,000 jobs in December. Economists had expected a decrease of about 525,000 jobs compared to the loss of 693,000 jobs originally reported for the previous month.

Peter Boockvar, equity strategist at Miller Tabak noted, “The job losses were spread out somewhat evenly between goods producing and service providing sectors and companies of all sizes shed jobs, with the smallest declines coming in large companies.”

Last month, ADP noted that that is has made methodological improvements to its report intended to improve the correspondence between the ADP report and the Labor Department’s monthly employment report, which includes government jobs.

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Posted in Categories: Economy, Forex, Releases, USA.

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