Page 38 - RusRPTAug19

4.5 Labour and income
4.5.1 Labour market, unemployment dynamics
The unemployment rate decreased from +4.7% in April to +4.5% in May. close to its all time low level of 4.3%.
Russia’s demographic pinch is now making itself felt as the size of the workforce is shrinking and will continue to do so for several years to come.
4.5.2 Income dynamics
Real wages increased +2.3% y/y in June, against a revised +1.6% y/y in May. Mild but robust growth in real wages underpinned demand, despite the fact the dominating narrative focuses on the expansion of retail lending as the key (if not the sole) supporting factor for domestic consumption growth.
Real disposable income in 1H19 dropped -1.3% YoY in 1H19 and declined -0.2% YoY in 2Q19 in particular, according to Rosstat.
According to Rosstat, real wages increased +1.4% y/y in June, while growth in May was revised downward from +2.8% y/y to +1.6% y/y. June's report marks the 35th consecutive month y/y real wage growth, with the average nominal wage now at RUB 49.8k (the value was beaten only twice: in the last month of 2017 and 2018, supported by year-end premia).
As of May, the highest nominal wage growth rate was observed in the segment related to metal ore production: +15.8% YoY. Nominal wages declined the most in the oil & gas sector: by -15.7% YoY. These developments are in line with the corresponding commodities' price evolutions: iron ore prices doubled YoY, oil prices were down -5.1% YoY. The sectors with the highest nominal wage growth are tobacco production (+11.3 % YoY), chemical production (+13.2% YoY) and financial & insurance activities (+12.5% YoY).
Slow real wage growth is due to two factors: i) higher CPI inflation in 2019 and
38 RUSSIA Country Report August 2019 www.intellinews.com