The business survey, taken midway through the month, found the diffusion index of manufacturing activity gained six points to minus 7.1, remaining short of the break-even point of zero.
The index has held below zero for four consecutive months as "nearly 30 percent of firms reported declines in activity this month, exceeding the 22 percent that reported increases," the Fed said.
The index for new orders and shipments both remained negative. The employment index held close to steady at minus 8.6.
In the month, slightly more than twice as many firms reported a decline in the number of employees -- 15 percent -- as reported increases -- 7 percent.
The average hours of work per week also declined, but not as fast as in the June report. The index for hours worked rose by 3 points, but remained negative for the fifth consecutive month, the Fed reported.