UPDATE 1-German unemployment falls more than expected in January

Thu Jan 30, 2014 4:43am EST

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BERLIN Jan 30 (Reuters) - German unemployment fell significantly more than expected on a seasonally adjusted basis in January to its lowest level in nearly a year, Labour Office data showed on Thursday.

Economists said the mild winter weather had likely contributed to the strong performance on the labour market, which in turn could bolster private consumption in Europe's largest economy.

The number of people out of work decreased by 28,000 to 2.927 million, the data showed, beating the mid-range forecast in a Reuters poll for a fall of 5,000.

"These are really good figures. The fact the winter was really mild for so long has possibly contributed to this," said Holger Sandte, an economist at Nordea.

"It suggests the economy is possibly growing more strongly than many assume at the moment. The low joblessness and the weak inflation are supporting consumption, the mood among companies is good."

Berlin is relying on German domestic demand to continue to prop up economic growth this year as weakness in the global economy weighs on exports.

The German jobless rate held steady at 6.8 percent in January. December's figure was revised down to that level from an originally reported 6.9 percent.

Germany's jobless rate has held steady at just below 7.0 percent for more than two years and is the envy of crisis-hit euro zone partners such as Spain and Greece where more than one in four people is officially out of work.

The figures are good news for conservative Chancellor Angela Merkel who formed a 'grand coalition' government with the Social Democrats (SPD) at the end of last year, which plans to increase public spending and introduce a minimum wage.

"The growth in jobs should continue strongly such that the number of unemployed continues to drop throughout the year," said Stefan Kipar at BayernLB.

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