The unemployment rate was unchanged at 8 percent in March after falling in February, while retail sales rose 2.9 percent in the same period, the State Statistics Service said Monday.
“For the next few quarters, the downward unemployment trend and signs of a pick-up in bank lending point to stronger domestic demand, and the external growth outlook is improving,” Anna Zadornova, an economist at Goldman Sachs, said in an April 15 research note.
Companies are adding workers because of mounting confidence that demand and profits will continue to improve. Manufacturers cut jobs last month at the slowest pace since September, while employment in service industries stabilized and was unchanged from February, according to purchasing managers’ indexes published by VTB Capital.
The service also reported that retail sales rose an annual 2.9 percent after a revised 0.9 percent gain in February, the third month of growth in a row.
Higher incomes and stabilizing unemployment are boosting consumer confidence. The average monthly wage rose 3.4 percent from last March, while disposable income was up 4.2 percent on the year. Unemployment was unchanged at 8.6 percent last month.
“Domestic demand is finally rebounding,” Alexei Moiseyev, a senior economist at Renaissance Capital, wrote in a note on April 12. “These factors raise tentative hopes that the economic recovery in Russia may be based on more than just the export of expensive commodities.”
Renaissance Capital raised its second-quarter growth outlook to 8.3 percent from 7.9 percent after domestic demand, as well as higher aluminum prices, fueled growth. The economy probably grew 7.5 percent in the first quarter, RenCap said.