March 31, 2015 / 8:13 AM / 5 years ago

German unemployment rate hits record low in March

Passengers walk inside Berlin's central railway station in this file photo taken on September 17, 2007. REUTERS/Fabrizio Bensch

BERLIN (Reuters) - Germany’s jobless rate hit a record low of 6.4 percent in March, data showed on Tuesday, in a positive sign for private consumption which is expected to drive growth in Europe’s largest economy this year.

That beat the consensus forecast in a Reuters poll for a reading of 6.5 percent and was the lowest since German reunification in 1990. It followed a reading of 6.5 percent in February.

The number of people out of work decreased by 15,000 on a seasonally-adjusted basis to 2.798 million, data from the Labour Office showed. That was bigger than the drop of 12,000 forecast in a Reuters poll.

“The job market has returned to full throttle growth in early 2015,” Berenberg economist Christian Schulz said.

Separate data on Tuesday showed that German retail sales jumped by 3.6 percent in February in real terms on the year as shoppers spent more online and on shops on food, clothes and cosmetic products. The notoriously volatile indicator was, however, down on the month.

Private consumption was a key growth driver in 2014, and looks set to keep propelling the economy this year thanks to low unemployment and robust wage deals, such as in the engineering and public sectors.

Other positive signs for household spending include consumer morale, which is at its highest in 13-1/2 years as cheaper oil leaves more cash in shoppers’ pockets for other purchases.

Record low interest rates also give consumers little incentive to save, Schulz said, adding risks like the Ukraine crisis and the possibility of a Greek exit from the euro zone had not yet hit consumer confidence this year.

“Within Germany’s golden decade, 2015 looks set to be a year of the consumer,” he said.

Editing by Madeline Chambers

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