Paul Lee, one of those picked to work at the Hampton Inn & Suites that is slated to open in December in downtown Providence, trains on a computer yesterday. About 5,000 people had applied for 50 to 55 positions at the new hotel.

The Providence Journal / Bob Thayer

Rhode Island’s unemployment rate of 8.8 percent in September ranked highest in the country, nudging ahead of Michigan’s, according to a federal report released yesterday.

Rhode Island has often recorded jobless levels near the top, but this marks the first time that it has ranked highest in the country since comparable data started being compiled 32 years ago, according to the U.S. Bureau of Labor Statistics.

Michigan’s unemployment rate last month was 8.7 percent. The national unemployment rate remained unchanged at 6.1 percent.

“Michigan is the poster child for recessionary conditions in the job market,” said Jared Bernstein, labor economist at the Economic Policy Institute, in Washington. “It’s amazing and disheartening that Rhode Island just took its place.”

The housing market’s collapse here followed years of sluggish job growth which quickly turned to job losses once the national economy began to weaken. Even before the national credit markets collapsed, economists had said Rhode Island was in a recession.

Rhode Island’s 8.8 percent unemployment rate is the highest in 16 years, and the ranks of the jobless last month swelled to 50,200, the most on record, according to state labor officials.

Rhode Island employers last month also shed 1,300 more payroll jobs, creating more competition for fewer job openings. A hotel operator recently recruiting for a new Hampton Inn & Suites being built in downtown Providence received 5,000 applications for 50 to 55 jobs that pay between $9 and $15 an hour. Of the 5,000 applicants, about 1,200 landed interviews.

“This is a classic case of labor supply outpacing labor demand,” said Bernstein. An oversupply of workers also tends to mean people are willing to work for less money, he said, and that can depress wages.

Nationally, there are three unemployed people for every available job, he said, which is double what it was just 1½ years ago.

Rhode Island’s new ranking as the state with the highest unemployment rate yesterday prompted U.S. Rep. James R. Langevin to write to House Speaker Nancy Pelosi reiterating his strong support for a new economic stimulus measure to extend federal unemployment benefits and create jobs.

“Communities across the state are seeing a marked increase in families seeking help to keep their homes, pay their bills, and put food on the table,” Langevin wrote. “This economic situation has taken a toll on our state’s social service centers, food pantries and homeless shelters, and it is clear that the worst is yet to come.”

The federal stimulus package includes money for infrastructure projects such as building roads to create jobs, as well as aid for emergency food assistance and for additional help for homeowners. (Legislation that Langevin and other House Democrats supported that would have provided an additional seven weeks of federally financed extended unemployment benefits last month failed to get consideration by the Senate.)

“Virtually every state is feeling it, but not quite as dire as it has been in Rhode Island,” said Denis M. McSweeney, regional commissioner for the U.S. Bureau of Labor Statistics in Boston

The highest national unemployment rate on record was at the end of 1982, when it hit 10.8 percent. That’s nearly a full percentage point above Rhode Island’s peak unemployment rate of 9.7 percent in November of 1982, according to the federal data, which goes back to 1976.

The unemployment rate is considered a “lagging” indicator because it acts like a rear-view mirror, reflecting jobs that have already disappeared. During the last nine months, Rhode Island has lost 12,600 jobs and the unemployment rate has jumped more than 3 percentage points, from 5.7 percent to 8.8 percent.

In June, July and August, Michigan reported the highest unemployment rate in the country, with Rhode Island in second place. In September, though, Rhode Island’s unemployment rate ticked up two-tenths of a percentage point, from 8.6 to 8.8 percent, and Michigan’s rate edged down two-tenths of a percentage point, to 8.7 percent.

Michigan labor officials described the September decline in the unemployment rate as “minor” and said it primarily reflected a sharp decline in the number of individuals in the state’s work force. (During recessions, economists say, the labor force tends to shrink as people give up searching for work.)

After Rhode Island and Michigan, the next two highest unemployment rates reported last month were in Mississippi, at 7.8 percent, and California, at 7.7 percent.

Federal labor officials reported the September unemployment rates for the other New England states as follows: Connecticut 6.1 percent; Maine 5.6 percent; Massachusetts 5.3 percent, Vermont 5.2 percent, New Hampshire 4.1 percent.

(The full list of states can be viewed at: www.bls.gov/web/laumstrk.htm)

The Rhode Island economy has slipped into recession twice over the last 20 years, most recently when the dotcom bubble burst in 2001. Back then, the housing market was soaring, and within a year the state labor market had recovered.

The other recession hit New England in 1989, with the collapse of the commercial real estate markets, and dragged down just about every sector. It lasted three years.

During the 1989-91 recession, Rhode Island’s unemployment rate peaked at 9 percent and the state lost 48,200 jobs, a decline of 10.4 percent, according to figures provided by state labor officials. Prior recessions brought even higher unemployment rates. In 1974-75, the state’s unemployment rate peaked at 13 percent.

With reports by staff writer Andy Smith

larditi@projo.com