Manufacturing output fell 0.4%, led by a 3% drop in the production of motor vehicles and parts.
US manufacturers have struggled this year, with output up only 1.8% in the last 12 months.
Manufacturing growth of 3.2% led the improvement.
Manufacturers expected growth of 4.5%. Instead, it fell 1.2%.
Factory output in the US rises by 0.7% in June as companies invest in vehicles and machinery.