Russian unemployment rate drops to 4.9% in May, nearing pre-pandemic level
MOSCOW, June 30 (Reuters) - Russia's unemployment rate declined in May to 4.9%, data showed on Wednesday, markedly below analyst forecasts and towards pre-crisis levels targeted by President Vladimir Putin.
During a live question and answer session broadcast by state television on Wednesday, Putin said the government should try and return the unemployment rate to 4.6%-4.7%, a level last seen before the onset of the coronavirus pandemic. The rate peaked at 6.4% in August.
The number of people unemployed in Russia was 3.7 million in May, down from a rate of 5.2% in the previous month, and well below the 5.2% rate predicted by analysts.
Central Bank Governor Elvira Nabiullina on Wednesday said changes in the labour market were pushing inflation higher and the impact did not appear to be temporary.
"The accelerated development of digital services, remote working, online shopping have all led to demand for some professions declining and for others growing," Nabiullina said.
"Therefore, the increased unemployment during the crisis could be structural - labour shortages in some sectors may be accompanied by high unemployment in others. And even with unemployment near pre-pandemic levels this can cause inflationary pressure."
The data, published by the state statistics service, Rosstat, also showed a 7.8% year-on-year increase in April real wages, adjusted for inflation and reported one month later than other indicators, also better than forecast.
Economic growth and a recovery in living standards are a crucial issue for Putin and the United Russia ruling party. The latter is bracing for parliamentary elections in September amid massive protests that rocked Russian streets earlier this year.
The economy has now returned to pre-pandemic levels, but inflation, on track to reach a five-year peak, is a headache for the central bank, which is expected to raise interest rates further this year, a Reuters poll showed on Wednesday.
Retail sales, a barometer of consumer demand that is Russia's main driver of economic growth, jumped 27.2% year-on-year in May, data showed on Monday. (Reporting by Alexander Marrow, Andrey Ostroukh and Elena Fabrichnaya; Editing by William Maclean)
