The already buoyant mood among German consumers improved further heading into September, a survey showed today, bolstering expectations that shoppers will continue to support growth in Europe's biggest economy in the second half of the year.

Household spending has overtaken exports as the main source of economic expansion in Germany as consumers benefit from record-high employment, increased job security, rising real wages and low borrowing costs.

The surprisingly strong data, published by the Nuremberg-based GfK institute, is the latest in a batch of solid economic figures that are likely to increase Chancellor Angela Merkel's chances – already high - of winning a fourth term in next month’s general election.

Gfk's consumer sentiment indicator, which is based on a survey of around 2,000 Germans, rose to 10.9 going into September, marking the fifth monthly increase in a row.

The reading was the highest since October 2001 and beat the consensus forecast in a Reuters poll of 10.8, unchanged from last month, which was the highest reading in nearly 16 years.

With Germany's robust labour market propelling consumption, tax revenues and overall growth, GfK linked the surprise rise in the main figure to further improvement in income expectations.

They climbed for the fifth month in a row to reach the highest since reunification in 1990.

"The very positive employment situation in Germany is and remains the most important factor for the good consumer mood," GfK researcher Rolf Buerkl said in a statement.

The solid labour market means that employees have very little fear of job loss. "As a result, Germans are more willing to be somewhat riskier in financial dealings and make larger purchases, which could also involve credit," Mr Buerkl said.

The survey showed that consumers' willingness to buy improved while their expectations for the future development of the economy as a whole became a bit more pessimistic.

MrBuerkl attributed this drop to some citizens becoming "possibly somewhat worried" that German exports might slow because of the scandal over diesel emissions engulfing the country's vital car industry.

The data comes on the heels of the closely watched Ifo index last Friday that showed German business confidence fell less than expected in August after climbing to record highs three months in a row.

Economists expect the German economy to continue its consumption-led upswing in the second half of the year after gross domestic product grew by 2.0 percent on the year in the first quarter and by 2.1% in the second.

The government predicts calendar-adjusted growth of 1.9% for 2017.

That would be on a par with last year's performance, which was the strongest among the G7 group of the world's most industrialised countries.