Why did I lose so little weight?

Okay after about 3 months of excessive eating and zero exercise, I cut back my calories to 1700 and started working out every other day. Its been a week and I only lost TWO pounds. If I were a few weeks into my diet, I would be ecstatic because 2 lbs is the perfect amount; however, usually my first week of dieting leads to 5-6 lbs loss due to water weight and stuff). That was when I ate 1500 calories, but didn't exercise. Do I need to cut back to 1500 calories (which would be hard because I am CONSTANTLY hungry as it is) or is the combo of exercise (around 2500 calories burned this week) along with the cut back in calories making my body go into starvation mode? Help, please.