South Korea's jobless rate fell in May from a month earlier but job creation slowed amid concerns labor market conditions might remain tough for many job seekers, a government report showed Wednesday.

According to the report by Statistics Korea, the jobless rate stood at 3 percent last month, down from the previous month's 3.2 percent. The rate also fell from a year earlier when it was 3.1 percent.

The jobless rate adjusted for inflation, however, edged up to 3.2 percent from April's 3.1 percent.

Job creation decelerated. The report showed that the number of employed people stood at 25.39 million in May, up 265,000 from a year earlier, which is smaller than the 345,000 on-year job creation tallied in April.

The manufacturing sector gained 105,000 jobs in May compared with a year earlier and the financial and insurance industries added 29,000 jobs over the cited period.

The service sector for arts, sports and leisure activities, however, suffered the largest loss of jobs in May when it shed about 46,000 workers. The agricultural and fishery sector lost 41,000 jobs, while the wholesale and retail sector also saw their payroll drop by 36,000 over the same period, the report showed.

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.

Last month, the National Assembly approved a 17.3 trillion won $15.27 billion) extra budget weeks after the government drafted the proposal to jump-start the slowing economy.

The extra budget plan will likely focus on creating jobs, a move in line with major policy objectives being pushed by the Park Geun-hye government, which was inaugurated in late February.

The government pushes to raise the employment rate to 70 percent during its five-year term. The report showed that the employment rate improved slightly to 60.4 percent last month, up from 59.8 percent in April.

The jobless rate for younger people fell last month but the decline was apparently due to more people choosing to study or to prepare to search for better jobs down the road amid toughened labor market conditions.

The unemployment rate for those aged 15-29 stood at 7.4 percent in May, down from 8.4 percent in April. It is also down from the 8 percent tallied in the same month last year, the report showed.

In particular, the number of people who temporarily gave up looking for work to prepare to job hunt in the future came to 561,000 last month, up 20,000 from a year earlier. This demographic is among the so-called economically inactive who are not counted as jobless. (Yonhap News)