Russia's recovery marked by pains

Russia's unemployment rose to a four-month high in November and retail sales fell on the month after rising slightly in October, indicating that the economic recovery remains uneven and painful, data showed on Friday. On the positive side, Russians had more cash to spend last month than in October and completions of housing picked up by about a fourth on the month.
Russia suffered more than most developing countries during the recent recession that wiped out a tenth of its gross domestic product in the first half of the year. The economy began showing some incipient signs of revival in the summer, aided by rising prices of oil - the country's chief export - and overall improvement in the global outlook.
There has been a slight spark in activity in some Russian industries and the 23.1 percent monthly rise in housing completions suggests that construction - another key contributor to economic growth in recent years - may have left the worst of the crisis behind. At 19,174 roubles ($626.7) per month, Russia's average wages are significantly higher than last year and those who work seem to have more disposable cash to spend. But uncertainty about the economy's future might curb their spending desires, economists said.
Retail sales fell by 1.3 percent on the month, after six consecutive periods of modest gains, spurring anxiety about December numbers - a traditional shopping time. "Hopefully, hopefully, hopefully, people were just saving in November for holiday shopping," Vladimir Osakovsky, head of strategy at UniCredit Bank, said. Russians continued to lose jobs for the second consecutive month in October, with the unemployment rate at 8.1 percent exceeding economists' forecast of 7.8 percent.
The rate, however, still remains below the five-year high of 9.5 percent registered in February. The disappointing November data does not spur hopes that demand - one of the major contributors to Russia's stellar growth for most of the decade - will pick up anytime soon. GDP contracted 3.8 percent in November, signalling the economy's best performance this year, but the government does not expect the economy to reach its pre-crisis growth rate until the end of 2012.