Jobless Rate Hits 4-Month High

Unemployment rose to a four-month high in November and retail sales fell on the month after rising slightly in October, indicating that the economic recovery remains uneven and painful, according to data released Friday.

The jobless rate rose for a second month to 8.1 percent, from 7.7 percent the month before, the State Statistics Service said. The median estimate in a Bloomberg survey of 15 economists was for a rate of 7.8 percent.

The rate, however, still remains below the five-year high of 9.5 percent registered in February.

On the positive side, Russians had more cash to spend last month than in October and completions of housing picked up by about one-fourth on the month.

Russia suffered more than most developing countries during the recent recession, which wiped out a tenth of its gross domestic product in the first half of the year. The economy began showing some incipient signs of revival in the summer, aided by rising oil prices and overall improvement in the global outlook.

There has been a slight spark in activity in some industries and the 23.1 percent monthly rise in housing completions suggests that construction may have left the worst of the crisis behind.

At 19,174 rubles ($626.7) per month, Russia’s average wages are significantly higher than they were a year ago, and those who work seem to have more disposable cash to spend.

“It’s not because the government was pushing salaries up or the private sector was increasing salaries; it was the effect of a stronger ruble,” Vladimir Tikhomirov, an economist at UralSib, said before the data were released. A stronger ruble also makes consumers less inclined to save, he said.

But uncertainty about the economy’s future might curb spending desires, economists said.

Retail sales fell 1.3 percent in November from October, the first monthly decline since April, while falling at a slower pace on an annual basis as a stronger ruble made imports cheaper and encouraged household spending. Sales declined 6.4 percent from a year earlier, compared with a revised 8.4 percent drop in October, the statistics service said.

Disposable incomes rose 1.9 percent last month after growing 9.9 percent in October. Real wages fell an annual 0.7 percent after a 3.5 percent decline the previous month.

“Hopefully, hopefully, hopefully, people were just saving in November for holiday shopping,” said Vladimir Osakovsky, head of strategy at UniCredit Bank. “We do have a crisis, and we do have a rising unemployment rate, and we do have some deterioration in retail sales.”

Fear of losing work is the biggest concern for 49 percent of Russians, according to a poll by the Levada Center published Dec. 14. That’s up from 17 percent in 1997, the year before the country’s last economic slump.

The jobless figure contrasts with assurances by Finance Minister Alexei Kudrin last week that the job-cutting “trend has been broken” and indications that the economy may be on the verge of recovery. Output contracted an annual 8.9 percent in the third quarter from a record 10.9 percent in the second as companies restocked inventories and oil prices recovered.

GDP contracted 3.8 percent in November, the economy’s best performance this year, but the government does not expect the economy to reach its precrisis growth rate until the end of 2012.

(Reuters, Bloomberg)