The German economy grew at its fastest pace since the country was reunified in the second quarter, helping the eurozone to outstrip growth in the US.

Europe's largest economy powered ahead between April and June, growing by 2.2%, thanks to a recovery in construction and strong foreign demand for German goods, the federal statistical office, reported today. This was well above market expectations of 1.4% growth. Growth in the first quarter was revised higher to 0.5% from 0.2%.

Germany's performance helped the 16-member eurozone grow by 1% in the second quarter, the strongest growth rate since the first quarter of 2008 and a strong improvement on the 0.2% recorded for the first three months of this year. The eurozone rate was also stronger than the US economy's growth of 0.6% in the second quarter, but not as good as Britain's 1.1%.

Economists warned that eurozone growth might be difficult to sustain. "The peripheral economies will continue to suffer from fiscal tightening and look set to remain in, or return to, recession," said Jennifer McKeown, senior European economist at Capital Economics. "Meanwhile, the German recovery will weaken as global demand slows and its own fiscal consolidation begins next year."

Nevertheless, the figures will come as a fillip to European leaders after a turbulent spring when the eurozone was threatened with collapse as the single currency was hammered on the financial markets and rioters took to the streets of Athens to protest at austerity measures.

"After three difficult months of eurozone battering, today's numbers will help to heal the eurozone's wounds. For the first time since the second quarter of 2009, the eurozone outpaced the US economy," said Carsten Brzeski at ING.

It is thought the eurozone has benefited from exports, investments and a backlog of work in catching up of the construction sector after a harsh winter.

The US economy, which was expected to recover more quickly from the recession, has been held back by unemployment and sluggish consumer spending.

Figures on retail sales released by the commerce department in Washington emphasised the problems facing the world's biggest economy. While sales grew 0.4% most of the growth was from increased car and petrol sales. Department stores were down 1% and sales dropped at clothing, furniture and hardware stores.

Every eurozone country has now come out of recession except Greece, which experienced a sharp drop of 1.5%. The best performers were by Germany, the Netherlands (0.9%), Austria (0.9%), Belgium (0.7%) and France (0.6%), while Spain (0.2%) and Portugal (0.2%) are lagging behind. "The euro area's recovery moved up a gear in the second quarter," said Chris Williamson, chief economist at Markit. "However, it remains to be seen if the buoyancy of the eurozone's core spills over to the periphery, or whether the periphery drags the core down."

The surge in German GDP prompted economy minister Rainer Brüderle to say growth of well above 2% was possible for 2010 as a whole – above the government's official forecast of 1.4% but in line with some economists' estimates.

Analysts were encouraged by a 0.4% rise in French consumer spending and a 1.1% increase in corporate investment. "The recovery is still on track in the second largest economy of the eurozone," said Oscar Bernal at ING. "Looking ahead, we expect economic activity in France to decelerate somewhat in the second half of the year as industry – and in particular the car industry – loses steam and is unable to benefit much from the recovery of international trade.

"France did weather the crisis well last year but the country now displays one of the largest fiscal deficits of the eurozone."

The euro rose against other currencies on the back of the German GDP figures, threatening to make European exporters less competitive. The euro climbed to $1.2896 against the dollar, up 0.5% on the day, and to ¥111.06, 0.8% higher.

"If the euro strengthens on the back of this, it will not be good news for other eurozone countries," warned David Owen of Jefferies International, speaking on Bloomberg TV. He pointed out that Germany's strong recovery from the downturn is not being mirrored across Europe. "Germany is only 30% of the system. The other 70% are struggling. The headwinds facing the system are still immense."

Germany is benefiting from a recovery in global demand, as well as the euro's 10% decline against the dollar this year.

The breakdown of the GDP numbers will be published in two weeks but recent monthly data indicates that growth was driven by exports and investments, while the drop in consumer spending should at least have come to an end.

"Today's numbers are an impressive reminder that the German economy is currently playing in a league of its own," said Brzeski. "Looking ahead, it is almost needless to say that the current growth momentum is hardly sustainable in the coming months. With the one-off impact from the construction sector and normalising of export growth, German growth will return to more ordinary growth numbers.

"Nevertheless, despite an inevitable slowdown, all ingredients are there for the German economy to take the next step towards a self-sustained recovery. The German economy should remain the top attraction of the eurozone league for some time."