US factory production flat in May; AI investment supporting manufacturing

U.S. factory production was unexpectedly unchanged in May, following prior monthly gains. Economists said firms may have been building inventories ahead of potential shortages and higher prices tied to the war in the Middle East, implying a possible supply-chain and inflationary precautionary effect rather than a clear demand slowdown.

Analysis

U.S. factory production was unexpectedly unchanged in May, following prior monthly gains. Economists said firms may have been building inventories ahead of potential shortages and higher prices tied to the war in the Middle East, implying a possible supply-chain and inflationary precautionary effect rather than a clear demand slowdown.