Prague, Moscow: Policy makers in the US and Europe have in the past been vexed by the presence of a “jobless recovery.” Russia is now experiencing something less annoying, but no less puzzling: a recession without unemployment.

Despite an economic contraction since the start of 2015, unemployment has now dropped for three straight months to near the lowest in a year. One reason the labour market hasn’t budged is that businesses have been hoarding workers, deflecting pressure with salary reductions, part-time hours and unpaid vacations.

To glean further clues to the resilience, however, Capital Economics is also looking beyond the official statistical rolls.

People employed informally in the shadow economy have been swept up in the job losses, and many of those have exited the workforce without leaving a trace, it said in a report.

Russia’s state statistics don’t show the full extent of unofficial work taking place. Even so, the number of permits for foreigners, most of them issued to workers from former Soviet republics, has dropped by about 1 million since 2014, according to Capital Economics. Russia’s workforce numbers just under 77 million, according to the Federal Statistics Service.

Companies were in fact quick to shake off their excess employees even if the adjustment was made below the surface.

“Foreign informal workers may have borne the brunt of the economic downturn,” William Jackson, a senior emerging-markets analyst at Capital Economics in London, said in the report. “Workers in the informal sector may have suffered job losses and/or reduced working hours which haven’t registered in the labour market figures.”

One implication is that Russia’s labour market is “hiding” slack. Given the share of people employed part-time or allowed to take unpaid leave, companies could add the equivalent of 1 million extra workers just by increasing the hours worked by those already on the books to the peak of average hours worked in 2012, Capital Economics said.

In turn, this could be a silver lining for the central bank as it tees up more rate cuts.

“Most immediately, this means the economic recovery is unlikely to be accompanied by a pickup in wage and price pressures,” Jackson said. “This supports our view that inflation will fall in the next year, allowing interest rates to be lowered by more than the markets currently expect.”