The contraction in manufacturing business activity in the Federal Reserve Bank of Richmond's district is moderating a bit. The Richmond Fed's composite manufacturing index edged up to minus 14 in October versus minus 21 in September and minus 19 in August. The Econoday consensus looked for a slight improvement to minus 17 in September.

New orders, the forward-looking indicator, came in at minus 17 in October versus minus 23 in September and minus 26 in August. Shipments improved to minus 8 from minus 18 and minus 15 in August.

Employment registered minus 17 versus minus 22 in September and minus 15 in August. Wages continue to rise: at 16 in October versus 15 in September and14 in August.

The Richmond Fed no longer reports seasonally adjusted prices paid or prices received figures. Not seasonally adjusted prices paid came in 2.70 in October versus 3.36 in September and 2.45 in August. NSA prices received registered 1.71 in October versus 1.57 in September and 1.87 in August.

The Richmond Fed's manufacturing index is seen contracting at minus 17, which is still a modest improvement from September's minus 21.

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.