Korea’s jobless rate rose in January from a month earlier, indicating job market conditions remain cloudy despite continued economic recovery, a government report showed Wednesday.

The jobless rate stood at 3.5 percent last month, up from 3 percent in December, according to the report by Statistics Korea.

It was also higher than the annual average of 3.4 percent for last year.

The economy still gained 536,000 more jobs in January compared to the previous year. The on-year job creation was the largest since 586,000 jobs were added to payrolls in May 2010.

“The relatively fast job creation pace is partly due to a low base last year,” said Suh Dae-il, an analyst at Daewoo Securities Co. “On a monthly basis, however, things are not showing signs of a marked improvement.

“Tougher overseas economic situations and slowing export growth will likely serve as a drag for the time being. Domestically as well, the outlook is not that great.”

The job data comes amid growing economic uncertainties, including a deepening eurozone fiscal debt crisis and a possible worldwide global slowdown. That could pose a serious threat to South Korea’s economy, which depends heavily on exports for its growth.

Korea’s trade balance turned into the red for the first time in two years last month due to a drop in exports. Overseas sales slipped 6.6 percent on-year to $41.54 billion in January.

The government earlier expressed concern the country’s exports would likely grow at a much slower pace this year, underlining the need to take measures aimed at propping up overseas shipments.

The domestic situation is not bright either. Stubbornly high inflation, among other things, remains a major factor that is taking a bite out of household income and consumption capacity, experts said.

Mindful of such risks at home and abroad, the government revised down its 2012 growth outlook from 4.5 percent to 3.7 percent in December.

The report showed that the hiring environment for younger people, in particular, is worsening.

The unemployment rate for those aged between 15 and 29 stood at 8 percent in January, up from 7.7 percent a month earlier. It is the highest rate since April last year when it stood at 8.7 percent.

The “economically inactive” population, which includes those who have given up looking for jobs, also increased to 16.74 million in January from 16.39 million tallied in December, according to the report. 

(Yonhap News)