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This is because manufacturers are letting go of employees, and are still reluctant to invest amid lingering uncertainties over the government's labor policy, say local analysts.
However, the country did see 263,000 jobs created last month compared to a year ago, the highest increase in 13 months
But most of these were offered to the elderly via a state program launched early this year. Also, jobs in welfare and social services, backed by government spending increased.
This means the administration is leading in work creation, and leaves the analysts questioning the viability, sustainability and quality of a job market driven by the government, rather than the private sector.
They say sooner or later, it will face limits to creating jobs through fiscal stimuli, and further policy adjustments will be needed to get the private sector to invest and hire.
"The job market will become very unsustainable should the government keep on spending and leading in job creation," said Sung Tae-yoon, an economist at Yonsei University.
"The hiring numbers may have increased, but most people would not perceive them as positive because, most importantly, the private sector is missing in action."
The number of unemployed reached a two-year high of over 1.3 million last month, up 380,000 from February 2018.
The unemployment rate increased 0.1 percentage points to 4.7 percent in the same period, as those in their 20s, 30s and 40s continue struggling to find jobs. The 40-something group, in this case, is trying to re-enter the employment market after losing jobs mostly in manufacturing.
More than 151,000 people lost manufacturing jobs last month. This is lower than the 170,000 lost in January, but manufacturers have been firing more than hiring now for 11 straight months.
For these people, the unemployment rate would "feel more like" it is over 10 percent, rather than at 4.7 percent.
"I would say this is very serious," Sung said.
The reasons for continuous job losses in manufacturing include slow innovation, the government's top-down policy approach and increasing labor costs following rapid minimum wage hikes, according to analysts.
Job losses in manufacturing have led to an increase in employment in agriculture and fisheries.
In February, agriculture and fisheries created 117,000 jobs, following 107,000 in January.
However, analysts say this isn't all good news.
"It seemed those who lost their jobs in manufacturing mostly crossed over to the rural areas. This may not be a good sign because they went to agriculture looking for jobs to survive, not with a particular interest in the sector," said Yun Chang-hyun, an economist at the University of Seoul.
Finance Minister Hong Nam-ki acknowledged in an economy-related meeting that private investment remains slow and low.
The ministry will seek to launch infrastructure projects worth 13 trillion won, including roads and railways, with the private sector within this year to revitalize the economy and create more jobs.
