The Federal Reserve Bank of Richmond's district manufacturing sector fell further into contraction with the Richmond Fed composite manufacturing index at negative 11 in December versus negative 5 in November, 3 in October and 5 in September. The Econoday consensus expectation called for minus 6.

New orders, the forward-looking indicator, dropped to minus 14 December from minus 5 in November, minus 4 in October and from 3 in September.

Shipments declined to minus 17 to in December from minus 8 in November and from 9 in October and 7 in September.

Employment eased to minus 1 in December from 0 in November, 7 in October and 7 in September.
Wages registered 22 in December versus 25 in November, 29 in October and 23 in September.

Prices paid were at 4.24 in December versus 3.08 in November, 3.02 in October and 4.06 in September. Prices received registered 2.79 in December versus 1.97 in November, 2.07 in October and 3.06 in September.

Richmond Fed's manufacturing index is expected to hold steady at minus 6 in December from minus 5 in November.

This survey tracks business conditions in the Richmond Fed's manufacturing sector. The headline index is a composite of the new orders, shipments, and employment indexes.

Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. By tracking economic data such as the regional Fed surveys, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth so that it won't lead to inflation. These surveys give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on market behavior.