The unemployment rate stood at 3.8 percent last month, up 0.2 percentage point from the same month last year, according to the report compiled by Statistics Korea. From a month earlier, it also rose 0.2 percentage point.

The number of employed people reached 26.86 million in June, up 301,000 from a year earlier, marking the lowest monthly gain since January 2017, when it was 243,000.

The unemployment rate for young people, aged between 15 and 29, was 10.1 percent, up from 9.4 percent tallied a year earlier and from May's 8.6 percent.

The employment rate rose 0.2 percentage point to 61.4 percent last month from a year earlier, with the corresponding figure for young people staying at 43.1 percent.

The statistics office said the increase in jobless rate is largely led by the sluggish hiring in retail and wholesale businesses and the accommodation sectors, both of which have been in a prolonged slump due to lukewarm private consumption.

The number of new jobs offered by hotels and restaurants fell 38,000 to 2.26 million last month, backtracking from a monthly 33,000 gain in May, while those by local retailers and wholesalers increased 8,000 to 3.73 million in June, down sharply from 52,000 tallied in the previous month.

According to separate government data, South Korea's retail sales slid 0.9 percent on-month in May and service sector output also decreased 0.3 percent as people are still reluctant to spend money.

The number of Chinese tourists visiting South Korea tumbled 64.8 percent in June, extending its losing streak to four straight months, following the Beijing government's travel ban in retaliation for Seoul's plan to deploy a U.S.-led missile system, called THAAD.

On the other hand, the manufacturing sector, which accounts for one-fifth of the country's total hiring, made a turnaround for the first time in nearly one year.

Some 4.5 million workers were employed by manufacturing companies in June, up 16,000 from a year earlier, snapping the 11-month consecutive losing streak that started in July 2016.

Local manufacturers newly hired around 150,000 people every month throughout 2015, with the number peaking at 191,000 in October of that year. But the figure plunged to 20,000 in June last year and posted negative growth the following month for the first time in 49 months as the country struggled with faltering exports.

But the downbeat pace of new jobs created by the sluggish manufacturing sector has been slowing down for months to a monthly 62,000 fall in April and a 25,000 drop in May after bottoming out at 160,000 in January. The developments reflect an upturn in the country's exports.

The South Korean economy seems to have entered an upside cycle as its exports, the key economic driver, posted the eighth consecutive month of growth since November last year on the back of rising global trade.

"The manufacturing sector made a recovery thanks to brisk overseas sales," said Bin Hyun-joon, head of the agency's employment statistics division. "But the demand side, it still remained weak. Sectors related to private consumption reduced their employment." (Yonhap)