South Korea's jobless rate fell to 2. 9 percent last month due to continued job creation in the manufacturing sector, but job creation for all industries slowed sharply, indicating that a rise in discouraged job-seekers and those who prepare for jobs drove down the unemployment rate, a government report showed Wednesday.

The unemployment rate came in at 2.9 percent in December, down 0.1 percentage point from the same month of last year, according to Statistics Korea. From a month before, the rate was up 0.1 percentage point.

After peaking at 4.2 percent in February, the jobless rate has trended down to 2.8 percent in November that is nearly at a full employment level, before slightly rising to 2.9 percent in December.

The unemployment rate gauges the percentage of people unemployed who actively sought jobs over the past four weeks to the economically active population, or the sum of people employed and those unemployed.

The jobless rate among those aged between 15 and 29 stood at 7. 5 percent in December, down 0.2 percentage point from a year before. The rate was up 0.8 percentage point from the previous month.

The number of people unemployed, who failed to land work despite job-hunting efforts, reached 737,000 last month, down 18, 000 from a year earlier.

"The on-year job growth slowed last month. But, the on-year gain in the economically inactive population led the reduction in those unemployed," the statistical agency said in a press release.

The economically inactive population, or people aged over 15 minus the economically active population, reached 16,709,000 in December, up 1.9 percent, or 315,000, from a year before.

The number of people who prepare for job-searching increased 82, 000 on-year to 584,000 in December, and the number of people too discouraged to continue their search for jobs rose 11,000 on-year to 204,000 last month.

Discouraged workers are those who want to work and are available to do so, but they failed to get the job due to tough labor market conditions. They are those who looked for a job sometime in the prior 12 months.

The so-called "take-a-rest" item, or those who replied that they took a rest during the job survey period, reached 1,641,000 in December, down 8.7 percent, or 156,000, from a year earlier. The item is important as it can include those who are unemployed and too discouraged to search for work for a long time.

Meanwhile, the total number of people employed reached 24,402, 000 in December, up 277,000 from a year before. The on-year growth was the lowest since September 2011 when the reading grew 264,000. The on-year growth fell below the 400,000 mark in October before sliding below the 300,000 level in December.

Job creation in the manufacturing industry continued to increase last month, but the figure for the building and communication service industry reduced, leading to the slower growth in December, the statistical agency said.

By industry, the manufacturing sector created 112,000 jobs last month, with the health and social welfare industry employing 88, 000 workers. The lodging and restaurant service industry added 61, 000 positions last month, and the transport industry hired 42,000 workers.

The publication, broadcasting, information and communication service industry reduced 43,000 jobs in December, and the construction sector cut 82,000 workers. The wholesale & retail industry decreased 33,000 positions.

The hiring rate, which gauges the percentage of working people to the working age population, or those aged 15 and over, came in at 58.3 percent in December, down 0.2 percentage point from a year before. The employment rate is an alternative measure to the jobless rate for assessing labor market conditions.

The number of people employed as a regular worker increased 458, 000 in December from a year earlier, but the number of workers hired on a daily basis reduced 80,000 last month. Temporary workers declined 111,000 over the same period. The number of self- employed increased 12,000 last month.

The number of those working less than 36 hours per week reached 3,326,000 in December, up 2.4 percent from a year earlier. Among them, involuntary part-time workers came in at 326,000, down 10.1 percent from a year before.

The involuntary part-time workers are those who want to work full time and are available to do so, but they are employed part time as their working hours are cut back involuntarily or they are unable to find a full time job.

In December, people working less than 18 hours per week stood at 1,074,000, among whom those working part time for economic reasons and wanting to work full time reached 105,000.