New York ? Improving labor market conditions and cheaper energy prices led to a sharp increase in a widely watched indicator of consumer confidence in the economy in December, a good sign for growth heading into the new year.

The Conference Board, a New York-based business research group, reported Tuesday that its index of consumer confidence leapt by nearly 10 points to 102.3 in December from 92.6 in November, following four months of declines. It was the highest level for the indicator since July and well above the 94 that investors had been expecting.

Richard Berner, chief economist with Morgan Stanley, cautioned against reading too much into the rebound in the indicator, which is often volatile.

Indicators of consumer confidence are widely watched by economists since spending by individuals makes up about two-thirds of all economic activity in the United States.