Editor’s note: This is the executive summary of the quarterly economic forecast from NCSU economist Dr. Michael Walden.

RALEIGH, N.C. – The very modest economy recovery in North Carolina continued in 2010, and all signs point to the same pattern in 2011 and 2012. Jobs increased by less than 1 percent.

The unemployment rate did fall by almost 1.5 percentage points, but mainly due to a sharp increase in the number of workers leaving the labor force.

Through the summer, retail sales in the state were running near 2009 levels, but are still down from pre-recessionary amounts.

Existing home sales were boosted earlier in the year from the homebuyer tax credit, but since the credit’s expiration, sales have slumped. However, wage and salary income and state public revenues showed upward trends in 2010.

The economy is running against two headwinds. One is the continuing deleveraging by households as they reduce debt, increase saving, and – as a consequence – spend frugally. The second is the residential housing market, which is still far from a balance between available supply and purchases.

Housing prices are expected to continue slumping in 2011.

The 2011 and 2012 forecasts therefore look like this for North Carolina.

Between 55,000 and 70,000 net jobs will be generated in 2011, and in 2012 the totals will be between 65,000 and 75,000.

The state’s unemployment rate will fall to 9.4 percent at the end of 2011 and 8.9 percent at the close of 2012.

Professional and business services will be the fastest growing job sector, and Asheville, Charlotte, the Triangle, and Wilmington will be the leading regional centers for growth in the state.

Read the full report here.

About the author: Dr. Mike Walden is William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy.

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