The unemployment rate in April 2023 has updated a record

The unemployment rate has updated its record. According to the new published data of Rosstat, in April this year, the figure was 3.3%. The previous minimum was recorded two months ago – in February (3.5%).

While unemployment in the country remains at a record low, this “does not mean that all problems in the labor market have already been solved,” Russian President Vladimir Putin said during a meeting with the government on March 29. According to him, questions about the quality of jobs remain open. “In some regions and localities, the unemployment rate is still much higher than the national average. At enterprises where output has declined, teams are partially loaded and work part-time. It is clear that this has a negative impact on wages,” he said.

Official statistics also registered an increase in the average monthly accrued wages. In March 2023, a Russian received an average of 71,334 rubles, which is 6.3% more than in the same period last year. By February 2023, the indicator increased by 9.5%. In real terms, wages increased by 2.7% yoy and by 9.1% mom.

The average monthly accrued pension of a citizen in April 2023 amounted to 19,435 rubles. The amount increased by 14.5% compared to the same month in 2022. But by March 2023, the indicator almost did not increase – the difference was fixed by only 0.4% upwards. In real terms, the pension increased by 11.9% compared to April 2022 and remained unchanged compared to the previous month.

Earlier in a thematic survey by the recruiting service HeadHunter, half of employers announced plans to increase the salaries of employees this year. Every second company surveyed (56%) stated that it plans to increase the payroll by 5-15%. Only 3% of employers are going to cut wage costs, most of them (almost two-thirds) – by 5-15%.

In addition, in subsequent years, the minimum wage (SMIC) will increase at a faster pace, said Deputy Prime Minister Tatyana Golikova during an expanded meeting of the collegium of the Ministry of Labor and Social Protection of the Russian Federation.

Low unemployment suggests that the cyclical economic recovery is over, said Alexander Isakov, Russia economist at Bloomberg Economics. “After three quarters of GDP growth at a rate of 0.6-1% qoq, growth will slow down to 0.2-0.4% in the II-IV quarters of 2023 and will amount to about 1.5% by the end of the year,” he said.

In addition, the data published by Rosstat indicate that tension in the labor market is not only remaining, but also growing, the author of the My Investments telegram channel, economist Rodion Latypov, is sure. “Now the situation in the commodity markets is no longer as optimistic as a year ago, and salaries have been rising since the fourth quarter of 2022 under the influence of a shortage of labor. The drop in unemployment to historic lows is another symptom of this shortcoming,” he explained.

Wage growth is one of the factors that provide a revival in consumer demand, Latypov added. Thus, in the first quarter of 2023, the share of income that households spent on goods and services turned out to be higher than in 2017-2019, before the pandemic, amounting to 89%. This share was higher only in the first quarter of 2022, when there was a rush of consumer demand, he specified. “In turn, the strengthening of consumer demand, on the one hand, will make a positive contribution to GDP dynamics in the II-IV quarters, on the other hand, it will be a source of additional inflationary pressure in the face of limited supply,” the economist predicts.