The contraction in manufacturing business activity in the Federal Reserve Bank of Richmond's district has deepened further with the Richmond Fed's composite manufacturing index down to minus 21 in September from minus 19 in August and minus 17 in July. The Econoday consensus looked for a slight improvement to minus 15 in September.

New orders, the key forward-looking indicator, remained at a gloomy minus 23 in September versus minus 26 in August and minus 23 in July.

Employment has hit the wall, down to minus 22 in September from minus 15 in August and minus 5 in July. Wages continue to rise at 15 in September versus 14 in August and 15 in July.

The Richmond Fed no longer reports seasonally adjusted prices paid or prices received figures, which is odd given its other indexes are seasonally adjusted. The price indexes are pretty stable. Not seasonally adjusted prices paid came in 3.36 in September versus 2.45 in August and 3.00 in July. NSA prices received registered 1.57 in September versus 1.87 in August and 1.31 in July.

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.