A leading gauge of U.S. home sales showed surprising strength, as falling prices began to entice buyers back into the market, but other signs of economic weakness persist.

April pending home sales -- meaning signed sales contracts -- rose 6.3% from March to a level of 88.2, the highest in six months, the National Association of Realtors said. A reading of 100 is equal to the average level of sales activity in 2001.

Pending sales typically lead actual sales by a month or two, but might overstate strength because of sales cancellations. Existing-home sales data for May will be released June 26.

"Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines," said NAR chief economist Lawrence Yun. He said it isn't clear whether the buyers are investors or those who intend to live in the homes. The index covers sales of existing homes, about 85% of the market, but not new-home sales.

Despite the gain, pending home sales remain 13.1% below the 101.5 level recorded in April 2007. Sales in the Northeast slipped, but sales were strong in the South, West and Midwest.

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On the job front, though, a new indicator released Monday by the Conference Board, a business-research group, suggests continuing job losses.

The board released an employment-trends index, which aggregates eight separate leading employment indicators, and has a series of historical data back to 1973. The index's May reading was 113.7 -- the lowest since 2004. The index has been falling steadily since last July except for a one-month rise in January.

Job losses are expected to continue in the coming months because the labor market has yet to stabilize, the board said. The index isn't meant to forecast changes in the unemployment rate, only job creation according to the government's monthly survey of business establishments.

The downturn in jobs reflected by the index is in line with past recessions, the group said. However, many companies have been cautious in hiring since the 2001 recession, so there may be fewer job losses ahead than in a typical recession, said senior economist Gad Levanon.

Job losses are measured by the government's payrolls report. The index will be released each month at 10 a.m. on the Monday following the government's monthly payrolls report. June data will be released Monday, July 7.

Write to Kelly Evans at kelly.evans@wsj.com

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