South Korea's economy is facing slowing employment and sluggish domestic consumption despite overall improvements in other major indicators, a government report showed Thursday, emphasizing that it will continue its policy efforts to boost economic vitality down the road.

"Recently, our economy is seeing its inflation stabilize with production, investment, exports and other major indicators also improving," the finance ministry said in the monthly report that analyzes the latest economic trends at home and abroad.

"But employment growth is slowing and consumption is showing signs of weakening more or less," it added.

The report is based on the latest economic indicators including employment, corporate investment, trade, industrial output and consumer prices.

South Korea's industrial output grew 1 percent in December from a month earlier, driven by robust production of visual, audio and communications equipment as well as semiconductors.

Facility investment also expanded 9.9 percent over the same period thanks to increased investment on machinery and transportation equipment.

Exports jumped 11.8 percent in January from a year earlier, with the country's trade surplus totaling about US$870 million, the report said.

The job market, however, remains a drag on the economy. The number of jobs added to the payrolls came to 277,000 in December, but its growth pace slowed for three consecutive months, the report noted.

The ministry said economic conditions confronting South Korea remain uncertain, citing the looming across-the-board automatic budget cuts in the United States, delaying recovery in Europe, which is slumping consumption here and causing instability in foreign exchange rates.

"We will keep close tabs on internal and external economic situations, while at the same time strengthen our monitoring on markets and continuing policy efforts to enhance the overall economic vitality," the ministry said.

"The top priority will also be placed on such efforts as helping stabilize the livelihood of ordinary people, keeping inflation under control and creating more jobs," it added.

Meanwhile, the state-run think tank Korea Development Institute said in a similar report that the economy is showing a "slight sluggishness" in domestic demand, echoing the government's overall views but noted that the sluggishness comes mostly from the investment side. (Yonhap News)