The ILO-definition unemployment rate in October remained almost flat at 5.5%, data by RosStat shows. Previously the unemployment moderated throughout 2013, and fluctuated around 5.3% since May.
Some indicators such as manufacturing and services PMI in the end of H1 and Q3 suggested that employment is falling for the first time since October 2010. Previously an analyst survey by Bloomberg expected unemployment to increase to 5.5% in July already.
In the reporting month, both the workforce declined and the number of unemployed remained almost flat. Labor force was at 75.7mn people. The number of unemployed was 4.1mn people in October, unchanged from July 2013 and also flat vs. 4mn people seen in October 2012. Official unemployment also remained flat at 0.8mn people, out of which 0.7mn people received unemployment benefits.
Previously in June 2013, at the St Petersburg Economic Forum, FinMin and EconMin argued whether low unemployment in Russia is counterproductive and the economy is showing signs of overheating. FinMin Anton Siluanov proposed to cut jobs in both private and public sector in order to increase labour productivity. Siluanov believes that capacity utilisation is almost full and additional investment will be less efficient. Ex-EconMin Andrei Belousov disagreed, reminding that capacity utilization is estimated at about 60%. Belousov also believes that unemployment is low at 5%-6% due to large “shadow” sector that absorbs the fluctuations in the labour markets.
The WB, as well as IMF, believes that tight labor market along with weak investment activity is constraining Russian economy that seems to be growing close to its capacity.
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