I have a photo on my SP page of this exact phenomena when I joined the gym. The before and after is pretty remarkable.
Besides the very good comments already made I'd point out that this slow weight loss may pick up a bit after the muscles have established equilibrium with increased glycogen uptake. Your body only does this for the first 6-8 weeks and then it kinda 'takes off' after that. The new muscle fibers will also burn more calories for you at rest which helps the metabolism. I have lost another 15lbs since my ST plateau so don't despair!
I love my muscles far more than a weak skinny body!
It's a common response when starting an exercise program for your muscles to retain water. It takes 3 water molecules to bond to each glycogen molecule, and this helps deliver energy to your muscles faster and helps them cope better with the new demands you are making of them.
Unfortunately, this increase in your lean mass can lead to little change in the scale even as you are burning fat.
However, muscle and water are considerably denser than fat, and typically this will result in inches lost, even if the scale is being unco-operative. And it sounds like this is pretty much what you are seeing.
You are right that muscle gain is a slow process (especially when you are running a calorie deficit to lose weight). This water weight is not really muscle tissue in the sense of the red fibery stuff, but it is lean mass rather than fat.
Put away the scale - the tape is a far more accurate measure of your progress.
6/24/13 9:38 A
Is it a given that when lifting heavy weights you don't tend to see a drop in lbs very fast? My scale is creeping down at a very slow pace. I don't even think I lose a lb a week sometimes. I'm completely ok with this because my body is getting smaller (down a smaller jean size, arms, waist, everything is smaller) and people are noticing (even at just over 5 weeks of starting the weights). I'm just curious if the lack of weightloss is typical for this type of exercise. I didn't think we built muscle that fast to not see much of a drop in the scale.
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