The Untold Story - Emergency Unemployment Compensation Claims Surge By 265k In One Week

Even as CNBC, which seems to be unaware it is now under new ownership and can stop selling GE stock all day, every day (will Cramer be allowed to pump the worthless equities of competitor cable and satellite companies going forward? Inquiring minds want to know), could not stop praising the fabulous improvement in continuing claims which plummeted by a whopping 5,000 from 462k to 457k, one number that everyone ignored, is the explosion in Emergency Unemployment Compensation - yes, the same name for insurance benefits as they roll beyond their standard expiration horizon, and which the Administration is set on extending to cover a period from now to infinity. That number skyrocketed by 265,300 in one week to an all time record of 3,859,553 for the week ending November 14, from 3,594,253 in the prior week. The chart below does the collapse a little more justice.

In light of this massive divergence in jobless trends, an eager Kool Aid drinking world is expecting Goldman's Jan Hatzius to provide a forecast (with at least 10 significant digit precision) ahead of tomorrow's NFP number. Jan, don't let the Goldman prop trading desk down!!!

Here is a primer on EUC :

The EUC program was created on June 30, 2008, by the Supplemental Appropriations Act of 2008 (P.L. 110-252). It made up to 13 additional weeks of federally-funded unemployment benefits available to unemployed individuals nationwide who had already collected all regular state benefits for which they were eligible and who met other eligibility requirements.

On November 21, 2008, the Unemployment Compensation Extension Act of 2008 (P.L. 110-449) expanded EUC to 20 weeks nationwide and created a second tier of 13 more weeks of EUC for individuals in States with high unemployment rates.

On February 17, 2009, the President signed the American Recovery and Reinvestment Act of 2009 which extends the period of time during which claims for EUC can be filed and benefits paid.

For information about how to apply for EUC, please see the map below which provides links to the websites for each state agency administering the EUC program.