German unadjusted unemployment fell in May to around 4.307 million from 4.443 million in April but consumers are still deeply pessimistic about the economy, newspapers reported on Saturday.
According to an advance copy of a report due to appear in Sunday's Welt am Sonntag newspaper, while headline unemployment fell by around 136,000 month on month, seasonally adjusted unemployment rose for a fourth month in a row.
The newspaper also said were not for changes made at the start of the year to the way unemployment numbers are calculated, headline unemployment would also have been at a record for the month. Germany's Federal Labour Office is due to publish May unemployment data on Tuesday.
The report coincided with an opinion poll that found fewer than one in 10 Germans are confident about Europe's largest economy.
Forty-eight percent of 1,000 Germans polled over June 1 and 2 assessed Germany's economic situation as "bad" and a further 44 percent viewed it as "not very good". Only eight percent viewed the situation positively, Germany's Frankfurter Rundschau newspaper said.
Germany's economy grew 0.4 percent in the first quarter, the fastest rate in three years, as strong exports offset flat private consumption.
But there are doubts whether growth will continue at that pace unless the domestic economy strengthens.
Consumers are saving more than usual for this point in an economic cycle, the Bundesbank said last month, blaming uncertainty over unemployment and government policies.
Germany's VDIK car importers association said on Friday car registrations probably fell four to five percent year on year in May, reversing gains made in March and April.
While retail sales rose in April compared with March they were below year earlier levels.
Economists expect no pick up in consumer confidence until uncertainty about employment eases.
Frankfurter Rundschau quoted government economic adviser Peter Bofinger on Saturday urging cuts to unemployment benefits due to take place next January to be postponed.
"No one knows what impact the benefit cuts will have on demand," Bofinger said.
"It could be a disaster, also because this reform will lead to a massive statistical rise in unemployment that could have a dreadful psychological effect".