BERLIN: Germany's jobless rate fell to a record low of 6.5 percent in January and Berlin predicts it will fall further through 2015, boosting expectations that private consumption will help drive growth in Europe's largest economy this year.
The jobless rate in January, which matched the forecast in Reuters poll, hit its lowest level since Germany reunified in 1990 after the December reading was revised up to 6.6 percent from an originally reported 6.5 percent.
The number of people out of work decreased by 8,000 on a seasonally-adjusted basis to 2.836 million, according to data released on Thursday. That compared with the consensus forecast in a Reuters poll for it to drop by 10,000.
Addressing parliament, Economy Minister Sigmar Gabriel said he expected the economy to grow 1.5 percent this year, the same as last year, helped by strong employment levels.
Employment is at a record high in Germany and wages are rising while inflation is at a five-year low. All that is helping to boost domestic demand at a time when investment is weak and exports are sluggish. A lower oil price and weaker euro are also boosting consumption and German industry.
Chancellor Angela Merkel's government introduced Germany's first country-wide wage floor of 8.50 euros an hour on Jan. 1. Gabriel said this was driving spending, though economists are divided about whether it will cost jobs or boost consumption.
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