The Conference Board's (search) gauge of future economic activity rose strongly in June, but economists expressed concern that weaknesses were developing in the nation's industrial sector.

The New York-based Conference Board said its Composite Index of Leading Economic Indicators (search) rose 0.9 percent in June to 137.7 after showing no change the month before and a 0.2 percent rise in April.

The June increase was the largest since a 0.9 percent rise in December 2003, the board said.

The figures were based on revised calculations of the index, which is closely watched as a signal of future growth in the U.S. economy over the next six months.

The latest figures incorporate two revisions — a statistical trend adjustment as well as a new way of calculating the yield spread, a component of the index that measures the difference between the yield on the 10-year Treasury note (search) and the federal funds rate.

Gail D. Fosler, the board's chief economist, told reporters that despite the strong June reading, she had concerns about the economy's strength.

"We believe the industrial economy is slowing down, that it is slowing down quite quickly," Fosler said. She said, however, that she did not believe a recession was in the offing, saying "we are way far away from anything that looks like a recession signal."

Instead, she said the nation's economy was likely to show growth of about 3.6 percent this year and slow to 3.1 percent in 2006.