Sharp drop in auto output lowers U.S. factory production

WASHINGTON (AP) — Automakers cut back sharply on production in August after a big gain in July, lowering overall factory output last month.

Manufacturing production dropped 0.5 percent, the biggest decline since January 2014, the Federal Reserve said Tuesday. The drop in auto output accounted for most of the decline. Production of computers, airplanes and furniture also fell.

The report comes just a day before Federal Reserve policymakers meet to consider whether to raise short-term interest rates they control for the first time in nine years. Weak overseas growth and the strong dollar, which are holding back factory output, could cause them to delay a rate hike.

Overall industrial production, which includes mining and utilities, dropped 0.4 percent in August, after a 0.9 percent rise in July.