South Korea's jobless rate inched up in June from a month earlier but job creation quickened sharply, raising hopes that labor market conditions might be improving, a government report showed Wednesday.

According to the report by Statistics Korea, the jobless rate stood at 3.1 percent last month, up from the previous month's 3 percent. The jobless rate adjusted for inflation remained unchanged at 3.2 percent over the cited period.

The pace of job creation, however, accelerated. The number of employed people stood at 25.48 million in June, up 360,000 from a year earlier, which is the largest on-year job creation since October of last year, the report showed.

The health and social welfare service sector gained 140,000 jobs in June compared with a year earlier and the manufacturing sector added 96,000 jobs over the cited period.

The lodging and dining sector also added 50,000 positions and the transportation industry gained 40,000 more jobs than a year earlier, the report showed.

However, job market conditions still remained quite bleak for many younger people.

The report showed that the jobless rate for those aged 15-29 stood at 7.9 percent in June, up from 7.4 percent in May. It is also up from the 7.7 percent tallied in the same month last year, according to the report.

The latest job data comes amid concerns that the country's economy might be falling into a prolonged low-growth phase as uncertainty persists at home and abroad.

South Korea's gross domestic product grew less than 1 percent on-quarter for the past eight straight quarters. The economy grew 2 percent in 2012, the slowest gain in three years.

In May, the National Assembly endorsed a 17.3 trillion won (US$15.16 billion) extra budget weeks after the government drafted the proposal to jump-start Asia's fourth-largest economy.

The government plans to frontload the newly secured budget, which will put much focus on creating jobs and stimulating overall domestic demand.

The report showed that the employment rate improved slightly to 60.5 percent last month, up from 60.4 percent in May. The Park Geun-hye administration is pushing to raise the employment rate to 70 percent during its five-year term. (Yonhap News)