The contraction in manufacturing business activity in the Federal Reserve Bank of Richmond district worsened in November compared with October and September.

The Richmond Fed's composite manufacturing index for current conditions slipped to minus 15 in November from minus 4 in October and minus 17 in September. The October decline in the composite index reflected lower readings for two of its three components -- new orders and shipments -- while employment improved but remained negative.

New orders, the forward-looking indicator, fell to minus 22 from minus 6 in October, minus 15 in September and minus 6 in August. Current shipments dropped notably to minus 14 in November from 4 in October, minus 20 in September and minus 5 in August.

Employment came in at minus 7 in November versus minus 10 in October, minus 15 in September and minus 11 in August. Wages rose to 24 in November from 15 in October, 13 in September, and 22 in August.

Price pressures increased. Not seasonally adjusted prices paid rose to 6.84 from 5.81 in October, 7.22 in September and 7.24 in August. NSA prices received registered 3.09 in November versus 3.04 in October, 4.02 in September, and 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.