Russia’s jobless rate fell to a record in May as businesses raised salaries faster than economists predicted, helping stem a three-month slowdown in real-wage growth.
Unemployment slid to 4.9 percent in May from 5.3 percent a month earlier, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median estimate of 16 economists surveyed by Bloomberg was 5.2 percent. Wages adjusted for inflation grew 5 percent after a revised 3.2 percent gain in April, topping the median forecast for a 1.5 percent increase in a separate poll.
“Such low unemployment while the economy is stagnating is caused by the worker deficit,” Oleg Kouzmin, an economist at Renaissance Capital in Moscow, said by e-mail. “We see a lack of employees even in sectors with high productivity.”
The unemployment drop is a sign of a growing labor shortage at a time the economy is beset by sanctions imposed by the U.S. and its European allies in the wake of President Vladimir Putin’s takeover of Crimea. Historically low unemployment is hobbling growth, with the demographic trends creating a long-term drag on the economy, the central bank said June 16.
While the tight labor market is fanning wage pressure, the pinch is exacerbated by slowing gains in labor productivity. It grew 1.6 percent last year, the slowest since 2009, compared with a 3.1 percent increase in 2012, according to official data.
Policy makers led by Chairman Elvira Nabiullina have raised their benchmark interest rate by 200 basis points since February, helping stem declines in the ruble triggered by the threat of wider economic sanctions over Ukraine.
The ruble’s rebound helped pare this year’s decline to about 4 percent against the dollar and made the Russian currency the third-best performer in emerging markets during the past three months. The ruble lost 0.2 percent to 34.4610 per dollar at 9:30 p.m. in Moscow.
The key rate was kept at 7.5 percent this week because the structural factors behind the economic slowdown can’t be solved using monetary policy, Nabiullina told lawmakers in Moscow today.
Real disposable incomes climbed 5.8 percent compared with 1.9 percent a month earlier, the statistics service said. Retail sales grew 2.1 percent from a year earlier after a revised 2.7 percent increase in April. Economists predicted a 2.7 percent gain for retail sales and an advance of 1.7 percent for incomes.
“With our labor market and some growth in industrial output, we can expect more active movement in real wages,” Vladimir Osakovskiy, the chief economist for Russia at Bank of America Corp., said by phone before the data release. “If there is a positive trend in wages, then we can expect the retail weakness to be temporary.”
Resilient consumer demand was offset by continued weakness in spending by companies last month. Fixed-capital investment fell 2.6 percent in May, contracting for a fifth straight month after a 2.7 percent decline in April.
The combination of low unemployment and a stagnating economy signals “the structural problem of demography -- as the working-age population is declining -- and of the investment climate,” Alexander Morozov, a Moscow-based economist at HSBC Holdings Plc, said by e-mail.
The central bank forecasts the economy will grow 0.4 percent in 2014, after expanding 1.3 percent last year, according to Nabiullina.
“Investment continues to contract because of declining profits in the real sector, limited access to long-term financing in both international and domestic markets,” the central bank said June 16. “Uncertainty about the international political situation also hampers production and investment.”