Signs of easing tensions in Russian labor market encouraging, but so far these are first signals - Nabiullina

MOSCOW. Oct 30 (Interfax) - The Central Bank of Russia sees the emergence of signs of easing labor market tensions, but so far these are only the first signals, Central Bank Governor Elvira Nabiullina said.

"No one will argue that low unemployment is an absolute great benefit; every pair of hands is busy, in high demand, but in our case low unemployment has already turned into a personnel deficit, and to be honest, it's difficult for me to provide [an example] - I looked for an example of some other large economy where labor market figures remained in such a zone for so long. And we also see from the experience of the last two years what this leads to - fierce competition among enterprises for workers leads to wages growing faster than labor productivity, pushing inflation up and devaluing those wages," Nabiullina said at the State Duma.

"Now the first signs of an easing situation in the labor market have appeared. This is indeed encouraging, but they are still only the first," she said.

As Rosstat reported on Wednesday, unemployment in Russia rose to 2.2% in September from the historical low of 2.1%, where it had held for two months, thereby returning to the level of May-July.

The Central Bank often receives objections due to citing enterprises that are switching to a four-day work week, she said. "But we looked - 0.2% of the 74 million people employed overall work at them. The majority of enterprises, and we survey up to 15,000 enterprises monthly across the country, and the majority unfortunately say that they lack workers; it's difficult to find them, to retain them," she said.

This illustrates that if one mechanically transfers the condition of one industry or one enterprise, even a large one, to the entire economy as a whole, the picture may turn out distorted. "Hence the talks about recession, the brink of recession, I would urge [everyone] to treat such statements very responsibly, because during a recession two things are inevitable - unemployment rises sharply, and then real wages fall. We currently have nothing close to either of these," she said.