Nearly 5,000 jobless people in Rhode Island ran out of unemployment insurance benefits during the first quarter of this year, up 29 percent from a year ago, according to the U.S. Department of Labor.

About 41 percent of Rhode Island’s unemployed in January, February and March “exhausted” their benefits, the highest of any New England state.

Nationally, the benefit-exhaustion rate was 36.4 percent, up about 9 percent from a year earlier.

The swelling ranks of unemployed in states such as Rhode Island is fueling calls by supporters of legislation pending in Congress to fund extended unemployment insurance to help pay for such basics as food, fuel and housing.

The legislation may be debated in the U.S. House of Representatives as early as today.

In Rhode Island, where the state unemployment rate in April was 6.1 percent, estimates of the number of jobless who could immediately benefit from the extension range from 6,500 to 8,000 or more.

If approved, the legislation would provide an additional 13 weeks of unemployment insurance to those who are eligible in all states whose benefits ran out on or after May 1, 2007. An additional 13-week extension would be available to states with seasonally adjusted unemployment rates of 6 percent or higher.

In Rhode Island, state unemployment benefits normally run up to 26 weeks.

“Historically when exhaustion rates have gotten up that high we’ve extended benefits,” said Jared Bernstein, a labor economist at the Economic Policy Institute in Washington. “It’s a signal that there’s just not enough job creation out there for people to find their way off the [unemployment] rolls.”

The argument that extending unemployment benefits will encourage people to be “lazy” about searching for work has “absolutely no legs,” Bernstein said, “when you’re looking at five months of net job losses [nationwide] and unemployment spiking more than it has in 20 years.”

Congress has approved federally funded extensions of unemployment benefits seven times during the last 50 years, the most recent in 2002, as part of the post-9/11 economic stimulus plan.

Nationally, the ranks of the unemployed have now swelled to 8.5 million, an increase of 1.6 million during the last 12 months, according to a June 9 report by the Democratic staff of the House Committee on Ways and Means.

The House committee estimated that the number of unemployed workers eligible for the extended benefits in Rhode Island through March 2009 could be as high as 24,417, according to the report. (The committee’s estimate includes 6,532 workers who have already exhausted their unemployment benefits since November of 2006 and are still unemployed, plus another 17,885 who are “projected” to run out of benefits from May 2008 through March 2009.)

The extended benefits would be paid for by the Federal Unemployment Trust Fund.

Rhode Island’s unemployment benefits are based on a percentage of earnings, up to a maximum weekly benefit rate equal to 67 percent of the average weekly wage of all covered workers.

Rhode Island state officials say that eligibility depends on a number of factors, not the least of which involves whether the person whose benefits ran out has found other work, either in Rhode Island or another state.

Raymond A. Filippone, assistant director of income support for the Rhode Island Department of Labor and Training, said he estimates 7,500 to 8,100 of the 10,800 people whose unemployment benefits have been exhausted during the past year could be eligible for the first 13 weeks of extended benefits.

The state estimate is based on the share of the eligibility rate during the last federal benefit extension in 2002, he said. Back then, about 6,000 unemployed workers — or 72 percent of the 8,200 unemployed whose benefits had run out — were eligible for extended benefits. The state unemployment rate at the time was 4.9 percent

During the first four months of this year, the state has reported that Rhode Island lost about 6,300 jobs and the number of unemployed residents in April was 34,800. The actual number of jobless in Rhode Island may be higher than the unemployment rate suggests, said Leonard Lardaro, an economist at the University of Rhode Island.

The number of people in the state who are exhausting their unemployment benefits has been rising at double-digit rates since April of last year, Lardaro said, while the size of the state’s labor force has been flat to declining. That suggests that some of the unemployed gave up looking for work, he said, so they’re no longer counted as part of the labor force.

(Only those who report actively searching for work during the previous month are counted by the government as unemployed.)

“The next step may be welfare or food stamps, and they might be on that already,” said Lardaro. Eligibility requirements for public assistance have also been raised, he said, which means some of those out of work may not qualify.

One positive sign, Lardaro said, is that the monthly index he created to track the state’s economy showed some modest improvement in April. “The data point to Rhode Island’s rate of decline slowing,” he said, “so we may be in the very early stages of establishing a trend of improving rates of decline, but not yet reversals…”

If that sounds like faint praise, Lardaro is the first to agree.

“A major improvement for Rhode Island,” he said, “would be attaining the status of ‘dead in the water,’ which implies no rate of decline.”

For now, Lardaro added, the federal benefits extension plan is “our best hope.”

larditi@projo.com