A key forecasting gauge for the U.S. economy rose 1.2 percent in December, its largest gain in almost six years, a private research firm said on Tuesday, suggesting the economy could recover in the months ahead.

The Conference Board reported that the U.S. index of leading economic indicators rose 1.2 percent in December after an increase of 0.8 percent in November. The December rise was the largest since February 1996, the board said.

The December rise exceeded expectations of Wall Street economists who had forecast the index to grow by 0.8 percent, as the economy still suffered from the aftershock of the Sept. 11 attacks on the United States.

``The strong signal from the indicators means that the recession could be over soon,'' the board's chief economist, Ken Goldstein, said in a statement. He noted the leading index has been growing strongly over the past three months.

Goldstein said that aggressive monetary policy on the part of the Federal Reserve, as well as a growth in the money supply, retail discounts and a fall in energy prices were contributors to ``the re-emergence of economic momentum.''

The lagging index, which measures past trends in the economy, rose 0.1 percent last month after a 0.3 percent drop in November.

Eight of the 10 components that make up the leading indicators index rose in December, led by jobless claims, the treasury yield curve, money supply and the average workweek.

Two components, capital goods orders and manufacturers' new orders, fell in December.