UPDATE 2-US Midwest business robust in December, jobs weak

(Adds analyst comments)

By Ros Krasny

CHICAGO, Dec 28 (Reuters) - Business activity in the U.S. Midwest expanded strongly in December, with new orders jumping to their strongest level in four months even as hiring levels slowed, a report showed on Friday.

Analysts suspected that the heartland's many export-related businesses are getting a boost from the weak U.S. dollar, even as the U.S. economy stagnates.

The National Association of Purchasing Management-Chicago business barometer rose to 56.6, its highest level since June, from 52.9 in November.

Economists had forecast the index at 51.8. A reading above 50 indicates expansion in regional activity.

"There's demand in the manufacturing sector and I suspect that it's external demand, not domestic," said Joseph Brusuelas, chief U.S. economist at IDEAGlobal in New York.

The level of new orders jumped to 58.4 from 53.9, matching the recent high from August. Order backlogs also surged, to 60.7, showing the broadest expansion since July 1994.

"Backlogs moved into the 'robust' category, meaning orders that will be met in the final month of the year," Brusuelas said.