Manufacturing business activity in the Federal Reserve Bank of Richmond's district deteriorated more rapidly in July with the Richmond Fed's composite manufacturing index down to minus 20 in July from a downward revised minus 8 in June (previously minus 7) and revised minus 13 in May (previously minus 9).

New orders, the forward-looking indicator, dropped to minus 25 in July from minus 12 in June, and revised minus 18 in May (previously minus 14). That July index for news orders is a much gloomier harbinger for future business.

Current shipments were down to minus 18 in July from minus 5 in June (previously minus 3) and minus 12 in May (previously minus 10).

Employment fell to minus 16 in July from minus 6 in June (was minus 5), and minus 5 in May (minus 2). Wages came in at 17 in July, 21 in June, (previously 20), and 23 in May.

Price pressures were steady. Not seasonally adjusted prices paid came in at 5.65 in July versus 6.10 in June, 5.35 in May. NSA prices received registered 3.16 in July versus 3.57 in June, 2.73 in May. The NSA figures were not revised.

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.