Federal Reserve reports factory production falls

WASHINGTON — Factory production unexpectedly fell in August and higher oil prices and rising interest rates could offset some of the support from an artificial intelligence build-out, likely keeping activity moderate for the rest of the year.

The output decline, reported Friday by the Federal Reserve, followed seven straight months of increases. The U.S. central bank raised interest rates Wednesday for the first time in three years and expects further hikes in the months ahead. Oil prices hover above $100 a barrel as the U.S.-Israeli war with Iran grinds on.

Manufacturing output fell 0.3% last month following an unrevised 0.2% rise in July. Economists forecast production would rise 0.3%. Output advanced 0.9% on a year-overyear basis in August, a modest increase some economists said indicated the Trump administration's aggressive trade policy did not have the desired effect of rejuvenating the nation's industrial base. The decline in August was led by a 0.5% drop in production of long-lasting manufactured goods.

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