I don't think this can be repeated enough. MUSCLE WEIGHS MORE THAN FAT! AND MUSCLE TAKES UP LESS SPACE THAN FAT!
Many people face and are confused by this. You can actually gain weight while going down multiple dress sizes. Also, if you have been on low fat for a while, you can have a deficit in your muscles that your first weeks/months on Atkins will work at repairing, even without a lot of exercise.

Have patience. You are seeing visual results. You are losing fat! Atkins is working! For a lot of people a tape measure or a picture reading at periodic intervals offers a truer picture of their "fat" loss.