BERLIN (Reuters) - German unemployment fell to its lowest level in more than two decades in February and consumer morale hit a more than 13-year high, boosting expectations that private consumption will help drive growth in Europe's largest economy this year.
Data from the Labour Office showed the number of people out of work in Germany decreased by 20,000 on a seasonally-adjusted basis to 2.812 million - the lowest since December 1991, just over a year after German reunification.
It fell further than forecast - a drop of 10,000 had been expected according to a Reuters poll.
The jobless rate stayed at a record low of 6.5 percent for a third straight month in February and remains the lowest since German reunification in 1990.
"Solid as a rock. The German labour market continues its success story, providing further evidence of strengthening domestic demand," said Carsten Brzeski, economist at ING.
"Looking ahead, the labour market should remain a self-priming pump of the German economy and an important growth driver," he added.
Separately, a survey by market research group GfK showed sentiment among shoppers jumping to its highest level since 2001 as low oil prices benefited households, freeing up cash for them to spend on other things.
Private consumption was the main growth driver at the end of 2014, and it looks set to keep driving the economy after Germany's largest labour union won a wage deal on Tuesday that will benefit 3.7 million workers.