Germany high street
German high streets saw a retail sales bounce in January (Reuters)

German retail sales in January soared at their quickest paces in six years as they more-than-recovered the losses from an unexpected sharp decline in the Christmas month before.

Federal Statistics Office data revealed that in January, Germany's retail sales grew by 3.1 percent on December's disappointing reading, which was revised down to a worsened 2.1 percent fall from an original estimate of 1.7 percent.

It is welcome news for the recession-mired eurozone area's powerhouse economy, which shrunk by 0.6 percent in the fourth quarter in its steepest decline since 2009.

Export-led Germany has been hurt by the global slowdown in demand and the continued weakness of fellow European economies.

However, Germany is expected to narrowly avoid recession as its economy picks up slightly in the first quarter.

Labour market figures for February show that the German unemployment rate held firm at its relatively low 6.9 percent. It is just 0.1 percent above the lowest rate since East and West Germany reunified in 1990.

Consumer and business confidence is also on the up in the German economy, another indicator that recession will be avoided.