New York ? A key measure of future economic activity rose sharply in May, beating analysts’ expectations and sparking hopes for a rebound. But don’t pop the champagne corks yet; economists say a few more months of positive readings are needed to inspire the business confidence needed for a full recovery.

The Index of Leading Economic Indicators rose 1.0 percent in May to 111.6, the New York-based Conference Board said. Analysts had expected a rise of about 0.6 percent.

The forecast followed encouraging news from the Labor Department that unemployment benefit claims are on the decline. And in welcome news for the housing market, a survey showed rates on 30-year mortgages remained at record low levels this week.

Though the index of leading indicators was slightly higher than anticipated, economists said the figure largely confirmed expectations. Investors remained cautious, sending stocks tumbling as they sought to preserve profits from previous rallies.

David Wyss, chief economist at Standard & Poor’s in New York, said the rise in the Conference Board index was the clearest sign that the economy is looking up.

“Everything is pointed in the same direction, except for the leading indicator, none of it is pointing too hard,” Wyss said. “I think that’s sort of the state of the economy right now. We may be turning the corner, but we’re taking it awfully wide.”

The Conference Board index measures where the U.S. economy is headed in the next three to six months. It stood at 100 in 1996, its base year.

The sharp increase in May, following a slight increase in April, comes after 18 months of essentially sideways movement.