U.S. industrial production unexpectedly fell in May, likely as a strong dollar and energy spending cuts continued to weigh on manufacturing and mining output, bucking signs of an acceleration in the broader economy.
Industrial output fell 0.2 percent after a revised 0.5 percent drop in April, the Federal Reserve said on Monday.
The production side of the economy continues to struggle against the lingering effects of dollar strength and deep spending cuts in the energy sector in response to a sharp decline in crude oil prices.
sufficiently strong that the Fed was going to give serious thought to September."
The FOMC move comes as unemployment continues to drop but inflation shows almost no signs of getting to the Fed's target rate of 2 percent. The jobless rate has fallen to 5.5 percent but most inflation measures are moored in the 1 percent to 2 percent range, with low wage pressures, energy prices well below their year-ago levels and the gross domestic product in check.
Traders for months had been expecting the Fed to move at the June meeting. Now, the likelihood is for September at the earliest, with Chicago Mercantile Exchange trading indicating a higher probability in December.