South Korea\'s economy shows signs of entering the phase of a \"gradual\" and \"moderate\" recovery with major economic indicators pointing to a continued improvement, a state-run think tank said Monday. \"The Korean economy saw a lag in improvement in some indicators but seems to have entered the phase of a gradual, moderate recovery,\" the Korea Development Institute said in its monthly report that analyzes the latest economic trends at home and abroad. \"Leading indicators continued to improve, and the economic slowdown seen in the first half this year eased slightly,\" it added. The assessment is based on its analysis of the latest economy-related indicators such as industry production, private-sector consumption and labor markets. The report said that the country\'s industry output \"expanded rather sharply,\" citing a 1.8 percent gain tallied in August, which marked the sharpest production growth in nine months. Retail sales also expanded \"at a higher rate,\" the report said, adding that production of consumption goods grew, pointing to \"positive signs\" of a consumption recovery in the private sector. As for the labor market, the report noted that the number of employed people grew by more than 400,000 in August compared with a year earlier, which indicates \"steadiness\" in the overall market conditions.