BERLIN (Reuters) - Germany’s jobless total fell far more than expected in February and retail sales surged in January, data showed on Friday, boosting expectations that private consumption will prop up growth in Europe’s largest economy in the first quarter.

People take a break as they visit a job fair for migrants to provide information about job opportunities all over the country in Berlin, Germany, January 28, 2019. REUTERS/Fabrizio Bensch

Household spending has become a key growth driver in recent years as Germans benefit from record-high employment and low borrowing costs and a GfK survey published this week showed the good mood among German shoppers was unchanged going into March.

The number of people out of work in Germany decreased by 21,000 to 2.236 million in February, seasonally-adjusted data from the Labour Office showed. That compared with the forecast for a drop of 5,000.

The unemployment rate remained at 5.0 percent, the lowest since German reunification in 1990.

Separate data from the Statistics Office showed German retail sales jumping by 3.3 percent on the month in January, marking their strongest rise since October 2016. But retail sales are a volatile indicator often subject to revision.

“Low unemployment, rising incomes and low interest rates are supporting consumption and housing construction,” said Joerg Zeuner, economist at KfW bank.

But he warned that trade conflicts caused by the United States and uncertainty related to Britain’s expected departure from the European Union were likely to take their toll.

“The economic engine is stuttering, which will slow employment growth this year,” he said.

Negotiated wages in Germany rose by 2.9 percent on average in 2018 compared with the previous year, data from the Statistics Office showed on Friday.

They rose more sharply than consumer prices which increased by 1.8 percent during the same period, the data showed, suggesting consumers have more money in their pockets to spend despite rising inflation.

The German economy posted its weakest growth in five years in 2018 and a survey published on Friday showed slumping exports contributed to the second successive monthly contraction in Germany’s manufacturing sector in February.