Midwestern manufacturing improved in December but is still contracting

The manufacturing industry in the Midwest continued to contract in December, but did exceed expectations and deliver the best reading in four months.

Why it matters: The Chicago PMI, which tracks manufacturing companies based in the Chicago region, continues to rebound from October's abysmal report that showed the weakest number in four years and the second lowest in a decade.

But, but, but: The October survey's historically low number was impacted by the nationwide strike at General Motors undertaken by the UAW. That was a major factor in the surge of jobs seen in November's nonfarm payrolls report as striking workers returned to their jobs.

• The fact that purchasing managers' indexes for the manufacturing industry did not see a similar boost in either November or December suggests the sector is in real trouble.

Plus, December marks the fourth month in a row the metric has been below 50, in contraction, and the sixth time in seven months.

• Business sentiment fell to 46.2 in the fourth quarter, marking the lowest quarterly reading since Q2 2009.

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