U.S. Midwest business contracts less severely

CHICAGO (Reuters) - Business activity in the U.S. Midwest continued to shrink in December but at a less severe rate than expected, and input prices fell sharply, a report showed on Tuesday.

The Institute for Supply Management-Chicago business barometer rose to 34.1 from 33.8 in November. Economists had forecast the index at 33.0. A reading above 50 indicates expansion while a reading below 50 indicates contraction.

The employment component of the index rose to 39.6 from 33.4 in November. Prices paid fell to 30.5 from 50.7 and new orders rose to 29.4 from 27.2.

(Reporting by Ros Krasny; Editing by Tom Hals)