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SA unemployment rate finally heads up


Last Friday, Rosstat published the monthly statistics pack on economic conditions for April.

The unemployment rate declined to 5.6% from 5.7% in March. However the seasonally higher demand on the labour force masked the upturn in the SA unemployment rate, which rose slightly (to 5.4%).

Wages growth has slowed, but from upwardly revised figures (real/nominal wages grew 4.2%/11.7% YoY last month vs. the 5.1% YoY and 12.5% YoY).

Real retail sales growth edged down to 4.1% YoY from March’s 4.4% YoY. The recent deceleration was mainly on slower food sales growth (1.6% YoY in April vs. 2.7% YoY in March), while a pick-up in non-food sales growth (to 6.2% YoY from 5.7% YoY) was supportive for the headline reading.

Investments declined 0.7% YoY in April, following a 0.8% YoY drop a month ago.

Construction slowed sharply to minus 3.7% YoY after two months of almost zero growth.

The April economic data pack from Rosstat confirms that March’s rebound was short-lived and that weak growth remained in place. Still solid activity in retail sales (mainly non-food) and IP (mining and utilities) were the only bright spots in the report, but the former looks inconsistent with the deepening drop in car sales, while the latter is a one-off. The pick-up in the SA unemployment rate shows that labour market conditions are gradually deteriorating, implying downward pressure on wages growth and thereby on consumption over the months to come. May’s readings are likely to be much worse than April’s owing to the extended public holidays.
Maxim Oreshkin. Daria Isakova
VTB Capital analyst

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