Hopes for a recovery in the eurozone economy this year were aided Thursday by figures showing bank lending to the private sector declined only slightly in January, while jobless numbers continued to fall in Germany. Data released by the European Central Bank showed lending to the private sector may be nearing a turning point after almost three years of decline. The ECB said that compared with the same month of 2014, lending to the private sector fell by only 0.1% in January after declining by 0.5% in December. The scarcity of credit in many parts of the currency area has been a key factor holding back investment, as has a lack of confidence among businesses and households. Separate figures released by Germany's Labor Agency showed the number of jobless fell more than expected in February, underlying the continuing strength of the country's labor market. The number of jobless fell by 20,000, according to seasonally adjusted data, after a decline of 10,000 in January. The adjusted jobless rate remained at 6.5% in February, same as in January and in line with analysts' forecasts. Low unemployment in the eurozone's largest economy contributed to a rise in consumer spending in the final months of last year, a key factor supporting a slight pickup in economic growth across the currency area as a whole. A survey also released Thursday showed German consumer confidence is set to rise in March, signaling continued strength in the domestic economy after it led the country to robust growth last quarter. The forward-looking consumer confidence indicator from the GfK institute in Nuremberg will rise to 9.7 in March after February's 9.3, GfK said. This beat the 9.5 predicted by economists in a survey by The Wall Street Journal. The March figure was the indicator's highest level since October 2001, when it stood at 11.0, GfK said. "Despite the continuing crisis in eastern Ukraine and uncertainty as to whether Greece will remain in the eurozone, Germans remain confident that their economy is clearly on course for growth," said GfK. Still, the institute said that events in those parts of the world couldn't be ignored. "If developments in these areas cause uncertainty among German consumers, this will also have a severe impact on the consumer mood and therefore also consumption," it said. Data released Tuesday by Germany's statistics office showed that the domestic economy was the main driver in the country's fourth-quarter growth. The pickup in domestic activity suggests the German economy is rebalancing after long facing international criticism for being too dependent on exports. GfK said the consumer would continue to play an important role in Germany's economic growth this year. "Private consumer spending will once again play a key role in economic development this year," the institute said, adding that it expected real private consumption in Germany to grow by 1.5% this year. Write to Todd Buell at todd.buell@wsj.com and Emese Bartha at emese.bartha@wsj.com

Source