The contraction in manufacturing business activity in the Federal Reserve Bank of Richmond's district eased again in January with the Richmond Fed's composite manufacturing index at minus 4 in January versus minus 10 in December and minus 14 in November.

New orders, the forward-looking indicator, came in minus 4 versus minus 11 in December and
minus 19 in November. Shipments were at minus 9 in January versus minus 11 in December and minus 12 in November.

Employment actually expanded at 3 in January versus minus 8 in December and minus 10 in November. Wage growth accelerated to 22 in January from 16 in December and 17 in November.

Price pressures remain muted. Not seasonally adjusted prices paid came in 2.37 in January versus 2.86 in December and 2.48 in November. NSA prices received registered 1.21 in January versus 1.71 in December and 2.07 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.