Putin looks for positives as Russias consumer demand, industrial output slide

MOSCOW (Reuters) – Russian President Vladimir Putin on Wednesday pointed to record low unemployment and marginally higher real wages as evidence of a gradual economic recovery, while data showed that consumer demand and industrial output dropped in February.

Russias export-dependent economy proved unexpectedly resilient in the face of tough Western sanctions last year, but a return to pre-conflict levels of prosperity may be far off as more government spending is directed towards the military.

Data from the Rosstat federal statistics service showed that Russias unemployment rate dropped to 3.5% in February, a record low, while real wages, which are adjusted for inflation, rose 0.6% in January.

Retail sales, a key gauge of consumer demand, fell 7.8% year-on-year in February, while industrial output dropped 1.7%.

“Unemployment in Russia remains at a record low level, however this does not mean that all problems on the labour market are already resolved,” Putin told a government meeting, mentioning issues around the quality of some jobs and specific regions where unemployment is above average.

Russias low unemployment is evidence of a labour shortage which has become more pronounced since Putin ordered a partial mobilisation of troops in September that saw hundreds of thousands of mostly young, working-age men called up to the army while others fled the country to avoid being drafted.

(Reporting by Alexander Marrow; Editing by Mark Trevelyan)