Russia’s unemployment rate fell to the lowest level in at least 13 years last month and retail-sales growth unexpectedly accelerated, supporting the central bank’s decision to leave borrowing costs unchanged.
The jobless rate dropped 0.4 percentage point to 5.4 percent, a level last seen four years ago and the lowest since at least 1999, the Moscow-based Federal Statistics Service said today in an e-mailed report. That’s less than the 5.7 percent median forecast of 12 economists in a Bloomberg survey.
The central bank left its refinancing rate at 8 percent for a sixth month June 15, saying borrowing costs are appropriate “in the coming months” for trends in the economy, which grew 4.9 percent from a year earlier in the first quarter. President Vladimir Putin needs a stronger labor market to sustain consumer spending and balance shrinking sales in Russia’s biggest trading partners, the European Union and China.
“The current level of unemployment is already somewhat below the potential level for the economy and there are certain inflationary risks in this regard,” Vladimir Kolychev, head of research at Societe Generale SA’s OAO Rosbank in Moscow, said by phone. “There’s no reason for the central bank to become particularly dovish for now.”
The 30-stock Micex Index was 1.2 percent lower at 1,372.76 in Moscow, bringing its 2012 decline to 2.1 percent. The ruble, which has lost 1.2 percent against the dollar this year, was down 0.3 percent at 32.53.
Retail sales grew 6.8 percent from a year earlier in May, the statistics service said. That’s quicker than April’s 6.4 percent advance, which was the slowest pace in nine months, and more than the 6.1 percent median estimate of 15 economists in a Bloomberg survey.
Consumers have been bolstered by slower inflation as prices grew at a record-low rate of 3.6 percent in May. Central bank Chairman Sergey Ignatiev this month reiterated his forecast for inflation to stay below this year’s 6 percent target, even as delayed utility-tariff increases in July spur price growth.
Real wages grew 11.1 percent and real disposable incomes rose 3.6 percent in May, compared with 9.6 percent and 2.7 percent median estimates in two Bloomberg polls.
Fixed-capital investment advanced 7.7 percent compared with 7.8 percent in April, beating the 6.9 percent median forecast in a separate Bloomberg survey. The government reduced its projection for economic growth this year to 3.4 percent from 3.7 percent, saying investment will be weaker than initially estimated.