By Michael Nienaber
BERLIN (Reuters) - German unemployment fell to its lowest level in more than two decades in April, data showed on Thursday, strengthening expectations that private consumption will help drive growth in Europe's largest economy this year.
The number of people out of work decreased by 8,000 on a seasonally-adjusted basis to 2.792 million, hitting its lowest level since December 1991, data from the Labour Office showed.
The jobless rate remained at 6.4 percent, the lowest reading since German reunification in 1990 and in line with the consensus forecast in a Reuters poll.
"The extremely solid labour market remains the showcase model of the German recovery," ING Bank analyst Carsten Brzeski said.
In another positive sign for private consumption, German retail data for January-March showed a 3.6 percent increase in shopping activity in real terms - the largest quarterly jump since the first three months of 2012.
The notoriously volatile indicator was unexpectedly down on the month in March, however, posting its biggest monthly drop since the end of 2013.
"Record low interest rates, the strong labour market and the high consumption intentions bode all well for domestic demand beyond the first quarter," Brzeski added.
Private consumption was a key growth driver in 2014 and looks set to keep propelling the economy this year thanks to robust wage deals, such as in the engineering and public sectors.
In addition, lower oil prices are freeing up some of consumers' cash for other purchases, making a further increase in private consumption likely in the comings months.