28.02.201822:55:00UTC+00German Jobless Rate Fell Sharply in February

Germany's jobless rate dropped in February while employment notched a record peak in January, data showed, highlighting the strength of the country's labor market.

According to data from the Federal Labour Office, the seasonally adjusted jobless total fell by 22,000 to 2.393 million.

The unemployment rate was unchanged at 5.4 percent in February, the lowest level since German reunification in 1990, the Office said.

Demand for workers stayed strong. About 764,000 job vacancies were registered with the BA in February, or 90,000 vacancies more than a year earlier.

In a further positive sign, seasonally adjusted employment as measured by the International Labour Organisation increased to a record 44.54 million in January, separate data released by the Federal Statistics Office showed.

The solid labor market is likely to continue supporting a consumption-led growth cycle in Germany where a rebound in exports and increased company investments have recently kicked in as additional growth drivers.

Household spending has become the main source of Germany's economic growth as record-high employment, increased job security, above-inflation pay hikes and low borrowing costs all help open shoppers' wallets.

However, the GfK's consumer sentiment indicator, which is based on a survey of around 2,000 Germans, dropped to 10.8 points going into March from 11.0 in February, which was the highest level since 2001.

The sentiment survey showed that the upbeat mood among shoppers deteriorated slightly heading into March, suggesting political concerns could be weighing on household spending.