Rosstat has published its June statistics pack on economic conditions.
Unemployment increased to 5.4%, from 5.2% in May. More importantly, the seasonally adjusted unemployment rate rose to 5.7%, the highest level since June 2012.
Real retail sales growth accelerated to 3.5% YoY, from a three-year low of 2.9% YoY in May, mainly due to non-food annual sales growing 1pp faster than a month ago.
Investment dropped 3.7% YoY in June, following almost zero growth over 5mo13.
Construction contracted 7.9% YoY, the steepest since the crisis, after a strong increase in May.
Real wage growth edged up 6.0% YoY, from the downwardly revised figure in May (to 4.7% YoY).
The June economic data pack indicates a strengthening in the turnaround on the labour market, with the SA unemployment rate jumping to a 1-year high. On the demand front, the picture was faltering with, on the one hand, a sudden steep drop in investment and, on the other, a technical rebound in retail sales growth (on the less negative calendar factor). Meanwhile, production stayed at a standstill. Looking ahead, the economic growth is set to revive over 2H13 owing to the favourable base effect, good harvest and the deepening in the monetary easing cycle, in our view.
For the CBR, the weak June report gives more grounds to remain dovish. Worsening conditions on the labour market and the strong decline in investments, as well as the technical nature of the recent rebound in the annual increase of retail sales and IP, are of significant enough concern to intensify the easing cycle, we believe. Slowing inflation also provides additional grounds for a more dovish CBR. The last unknown before the next CBR meeting is the first 312-P auction, on 29 July.