US Factory Production Unexpectedly Falls in August Amid Rising Costs

US factory production unexpectedly fell in August by 0.3%, marking the first decline after seven consecutive months of increases, according to a report from the Federal Reserve.

The decline was led by a 0.5% drop in the production of long-lasting manufactured goods and a 1.2% decrease in motor vehicles and parts production.

The AI spending spree has cushioned the blow from import tariffs on manufacturing, but economists are concerned that rising oil prices and interest rates could offset this support and keep activity moderate for the rest of the year.