South Korea's jobless rate edged up in June as the Middle East Respiratory Syndrome outbreak caused a sharp slowdown in growth of new hirings by the service sector, a government report showed Wednesday.

According to the report by Statistics Korea, the jobless rate stood at 3.9 percent last month, up from 3.8 percent in May. The number also rose 0.4 percentage point from a year earlier.

The seasonally adjusted jobless rate for June was 3.9 percent, unchanged from the previous month. The national employment rate also remained flat at 60.9 percent.

The latest data showed the number of employed people reached slightly more than 26.20 million last month, a modest gain from 26.18 million tallied in May, with 329,000 new jobs being created on-year, the report showed.

The increase in jobs last month represents a drop from 379,000 new positions created in May.

The statistical agency said agrofisheries and the financial sectors shed 123,000 and 57,000 jobs, respectively, last month compared with the year before. Such losses offset 133,000 jobs created in the manufacturing sector and smaller numbers created in the service industry.

"The MERS outbreak pushed down the number of jobs created in certain service businesses," said Sim Won-bo, head of the agency's employment statistics division. He added the drop in people hired in the agrofisheries financial sectors also affected the jobless rate.

The MERS outbreak has claimed 36 lives and sickened 186 people, sparking a health scare and making a big dent in service businesses.

Another reason for the slight rise in the overall unemployment rate was also attributed to a jump in youth unemployment.

According to the report, the unemployment rate for young people between the ages of 15 and 29 rose to 10.2 percent in June from 9.3 percent a month earlier.

The number of young people and those over 50 who sought jobs last month rose by 101,000 vis-a-vis the year before. The higher number of jobseekers affects jobless rate numbers.

The so-called labor underutilization indicator climbed to 11.3 percent last month from 11 percent in May.

The indicator is based on guidelines made by the International Labor Organization and reflects the number of people who are underemployed and those who currently hold part-time jobs but want full-time work.

It also counts unemployed people who have given up looking for work not by choice but due to other circumstances, which makes them potential jobseekers.

The rise is an indication that employment conditions felt by ordinary people are worse than what official jobless figures show.

Starting last year, the statistical office decided to provide the indicator to give a more accurate picture of the country's labor market situation.

The finance ministry said June's employment and jobless numbers were influenced by MERS and the ongoing restructuring efforts taking place in the financial sector.

"MERS poured cold water on employment figures that had been improving, with certain retail, tourism and entertainment-related jobs being hit hardest," it said.

While jobs created in the agrofisheries and financial sectors continued to decline, manufacturing once again added more than 100,000 jobs in June, it said. This represents the 14th month in a row that manufacturing jobs rose by more than 100,000.

The ministry, meanwhile, predicted that employment figures should continue to move up gradually, although the pace of growth will be determined by when MERS comes fully under control and other developments that impact the economy.

It said the 22 trillion-won ($19.2 billion) stimulus package unveiled by the government that includes an 11.8 trillion-won extra budget, may help revive economic vitality that can help the country's job market. (Yonhap)