A monthly gauge of U.S. online labor demand soared in August at its fastest pace in four years, indicating steadier footing for nationwide labor demand, a private research group said on Thursday.

Monster Worldwide Inc , an online careers and recruiting firm, said its employment index surged to 121 in August, up 6 percent from 114 in July.

It was the biggest monthly increase the index has seen since August 2005.

The index was down 24 percent from a reading of 159 a year ago, marking the most moderate year-over-year decline in 2009.

Though job openings posted online are at their lowest in almost two and a half years, there are signs employment may turn around in the near term.

The significant jump in the Monster Employment Index in August offers encouraging signs of improvement in the U.S. economy with the demand for managers and professionals as well as sales and office workers picking up in time for the fall hiring season, said Jesse Harriott, senior vice president at Monster.

The index rose to its highest since February, and contracted on a yearly basis at the slowest rate since December 2008, Harriott added.

Labor demand in the retail, administrative and financial industries showed the strongest growth, and a recent rise in investor confidence sparked increased opportunities in company management.

By occupation, employment in the arts design, entertainment, sports and media sectors picked up in August after hitting historic lows, while demand for healthcare, community and personal care services jobs suffered for the second straight month.

The Monster Employment index is a monthly analysis based on a selection of corporate career sites and job boards. The margin of error is approximately plus or minus 1 percent.

(Reporting by Camille Drummond; Editing by Leslie Adler)