By MICHAEL WALDEN, NCSU Economist

Editor’s note: , William Neal Reynolds Distinguished Professor, Department of Agricultural and Resource Economics, North Carolina State University. This is the executive summary from his latest economic update, which was published Wednesday.

RALEIGH, N.C. – Most indicators of the North Carolina economy have improved since late 2009, suggesting that growth has returned and the recession has ended.

Employment, retail sales, home sales, wage and salary income, even state tax revenues have all registered gains in the last six to nine months. But while the state economy is no longer receding, current levels of the major indicators are still well below pre-recessionary levels.

The economic recovery will likely proceed at a slow, agonizing pace, in large part due to the debt reduction households are engaged in to rebalance their financial sheets after their significant loss of wealth.

Debt repayment combined with increased saving means consumer spending – which accounts for 70 percent of economic activity – will advance very slowly and result in a modestly expanding economy.

North Carolina will generate 70,000 to 80,000 net new jobs annually in 2010 and 2011, and the state’s end-of-year unemployment rate will be 9.5 percent in 2010 and 8.5 percent in 2011.

North Carolina’s economy outperformed the nation in growth during the last expansion from 2002 to 2007. In looking ahead to how the state might perform in the new expansion, the state has advantages in several key factors, including high labor productivity, a modest cost-of-living, affordable higher education expenses, and superior performance in recent national math tests for elementary students.

However, the state ranks low in some highway infrastructure measures and ranks high in some indicators of risky, unhealthy behavior of households.

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