* Unemployment rises to 7.2 pct from Nov's 6.7 pct
* Highest since May, analysts had forecast 6.8 pct
* Next central bank rate hike seen as soon this month
* PPI points to slower CPI inflation in 6 months' time
MOSCOW, Jan 21 (Reuters) - Russia's unemployment hit its highest in seven-months in December but remained well below 2009 highs and looked unlikely to deter the central bank from raising interest rates to fight inflation.
The number of unemployed in Russia was 5.39 million at the end of December, taking the jobless rate to 7.2 percent from November's 6.7 percent the previous month, exceeding analysts' forecasts of a 6.8 percent rate. [ECILT/RU]
The data underscores the fragility of the Russian economy's recovery since it suffered its deepest recession in 15 years, hit by the slump in the prices of key exports metals and oil in the wake of the global economic crisis.
But, despite blips, the recovery continues. For 2010 as a whole, unemployment averaged 7.5 percent -- higher than the 7.0 percent forecast by analysts but a definite improvement on the six-year peak of 8.6 percent recorded in 2009.
As such, analysts said the central bank would likely continue to focus more on containing runaway inflation and follow up December's hike in deposit rates with further monetary tightening as soon as its end-January meeting.
"It (unemployment spike) is a short-term trend ... and it does not mean that the recovery will deteriorate further," said Vladimir Pantyushin, analyst at Barclays Capital.
"Trade and industrial output data show that the fourth quarter will be better after the 'burnt-out' third quarter due to the weather.
"There is a very high chance that the interest rates will continue to be raised ... Will it happen in January? Most likely. Inflation has deteriorated (since the last meeting)."
Consumer prices rose 1.4 percent in the first 17 days of January -- faster than the 1.2 percent increase seen a year ago [ID:nLDE70I1FT].
PRICE WORRIES
Officials from the central bank and the Economy Ministry have acknowledged that it will be tough to meet the 2011 inflation target of 6-7 percent. [ID:nLDE70J25I] [ID:nLDE70J1XH]
Inflation is also cited as a top popular concern in opinion polls and the government is likely to want to get prices under control before Russians go to parliamentary polls in December.
One glimmer of hope though comes from producer prices, which rose just 1.0 percent, month-on-month, in December against forecasts of 2.5 percent. [ID:nMSC000137] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
-- For a TABLE on jobless data see [ID:nMSC000139]
-- For a graphic on PPI and oil prices, see http://r.reuters.com/xuf47r
-- For a graphic on Russian inflation, see http://r.reuters.com/men27r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
"PPI is a forward-looking indicator for consumer prices, we estimate the lag between them at 6 months. Therefore inflation should slow down in the middle of 2011, if you do not take into account other external risks," said Natalia Novikova, analyst at Citi.
In year-on-year terms though their inflation accelerated to 16.7 percent from the 16.0 percent seen in November.
(Reporting by Toni Vorobyova and Maya Dyakina)