Business activity in the Federal Reserve Bank of Richmond's district manufacturing sector contracted again in July from June, and by more than expected. The Richmond Fed composite manufacturing index dipped to minus 17 in July from minus 10 in June and minus 2 in May. The Econoday consensus forecast called for a modest improvement to minus 7 for July.

New orders, the forward-looking indicator, came in at a gloomy minus 23 in June, down from minus 16 in May and minus 7 in April. Shipments dropped to minus 21 in July from minus 9 in June and 8 in May.

Employment registered minus 5 in July versus minus 2 in June and minus 5 in May. Wages were at 15 in July versus 21 in June and 14 in May.

The Richmond Fed announced it would no longer report seasonally adjusted prices paid or prices received figures. So, not seasonally adjusted prices paid came in at 3.00 in July versus 3.58 in June and 2.73 in May. Not seasonally adjusted prices received registered 1.31 in July versus 2.35 in June and 1.55 in May.

Richmond Fed's manufacturing index is expected to remain in contraction in July at minus 7 from June's lower-than-expected minus 10.

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.