For an eleventh straight month, more manufacturers in the mid-Atlantic region are reporting a decline in monthly conditions than a rise. The Philadelphia Fed's manufacturing index is at minus 13.7 this month, slightly less weak than Econoday's consenus for minus 14.5 but a bit weaker than May's 10.4.

New orders are also weaker this month, at minus 11.0 versus minus 8.9 in May, as are backlog orders at minus 18.5 versus plus 0.8 percent. These two readings alone will have economists forecasting a twelfth straight headline decline for July's report.

Employment among the sample is also down this month, at minus 0.4 which, however, is an improvement from April's minus 8.6. Shipments keep moving out the door at plus 9.9 but with backlogs low, steady production rates can't be guaranteed.

And in other less-than-positive readings, all this weakening isn't yet pulling down prices. The monthly pace of increase for input costs is little changed at 10.5 while selling prices remain steady at 0.1.

This report is offset perhaps by Empire State which was also released this morning and which has rebounded higher this month. But Empire State has been bouncing around wildly, unlike the Philadelphia report where the steady beat has been downbeat. Watch for industrial production coming up on the Econoday calendar at 9:15 a.m. ET.

The Philadelphia Fed manufacturing index has been in contraction the last ten reports, at minus 10.4 in May with June's consensus at minus 14.5.

The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production.

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 Philly Fed survey, 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. The Philly Fed survey gives 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. Some of the Philly Fed sub-indexes also provide insight on commodity prices and other clues on inflation. The bond market is highly sensitive to this report because it is released early in the month and is available before other important indicators.