Kansas City Fed district manufacturing activity sank further into the doldrums as the Kansas City Fed composite index of current conditions slipped to minus 13 in July from minus 8 in June, minus 2 in May, minus 8 in April, minus 7 in March, and minus 4 in February. Expectations for July centered on minus 5.

The composite index of six-month expectations for business conditions remained slightly positive at 5 in July versus 7 in June, 6 in May, 2 in April, 1 in March and 2 in February.

The current new orders index came in at minus 21 in July versus minus 13 in June, minus 13 in May, minus 6 in April, minus 17 in March and minus 2 in February. Production was at minus 12 in July versus minus 11 in June, minus 1 in May, minus 13 in April, minus 9 in March and 3 in February. The number of employees index was at minus 12 in July versus minus 11 in June, 9 in May, minus 2 in April, 6 in March and 8 in February.

Prices paid registered 17 in July, 9 in June, 19 in May, 18 in April, 17 in March and 15 in February. Prices received were at 0 in July, 3 in June, 7 in May, 0 in April, 5 in March, and minus 2 in February.

The Kansas City Fed index offers a monthly assessment of change in the region's manufacturing sector. Positive readings indicate monthly growth and negative readings monthly contraction. Readings at zero indicate no change. The headline number is the composite index, an average of the production, new orders, employment, delivery time, and raw materials inventory indexes.

Investors track economic data like the Kansas City Survey of Manufacturers to understand the economic backdrop for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a moderate growth environment that will not generate inflationary pressures. The survey gives a detailed look at Tenth District's manufacturing sector, how busy it is and where it is headed. Some of the survey indexes also provide insight on inflation pressures—including prices paid, prices received, wages & benefits, and capacity utilization. The equity market is also sensitive to this report because it is an early clue on the nation's manufacturing sector, reported in advance of the ISM manufacturing index and often in advance of the NAPM-Chicago index.