Midwest business growth highest in nearly a year

NEW YORK (Reuters) - The pace of business activity in the U.S. Midwest rose to its highest level in nearly a year in February as new orders increased, a report showed on Thursday.

The Institute for Supply Management-Chicago business barometer rose to 56.8 from 55.6 in January, topping economists' expectations for 54.3.

It was the highest level since March 2012. A reading above 50 indicates expansion in the regional economy.

The gauge of new orders was also at its highest since last March, rising to 60.2 from 58.2 but the employment component fell to 55.7 from 58. Inventories fell to 50.1 from 55.0.

Financial markets reacted little to the data as investors were taking in an earlier report that showed the U.S. economy grew only slightly in the fourth quarter.

The Chicago report is one of the last snapshots of regional manufacturing ahead of a look at the sector on the national level, due to be released on Friday. That report is expected to show the pace of growth slowed slightly this month.

(Reporting by Leah Schnurr; Editing by James Dalgleish)