Manufacturing business activity in the Federal Reserve Bank of Richmond's district continued to contract in October but at a slower pace versus September. The Richmond Fed's composite manufacturing index for current conditions edged up to minus 4 in October from minus 17 in September and minus 7 in August. The October improvement reflected higher readings for its three components -- new orders, shipments, and employment.

New orders, the forward-looking indicator, is at minus 6 in October versus minus 15 in September and minus 6 in August. Current shipments perk up to 4 in October from minus 20 in September and minus 5 in August.

Employment comes in at minus 10 versus minus 15 in September and minus 11 in August. Wages are at 15 in October versus 13 in September and 22 in August.

Price pressures ease notably. Not seasonally adjusted prices paid is at 5.81 in October versus 7.22 in September and 7.24 in August. NSA prices received register 3.04 in October versus 4.02 in September, 3.14 in August.

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.