WASHINGTON (Reuters) -U.S. business inventories increased as expected in June, lifted by higher motor vehicle stocks.

Inventories rose 0.2% after being unchanged in May, the Commerce Department’s Census Bureau said on Friday. Inventories are a key component of gross domestic product and one of the most volatile. They increased 1.6% year on year.

Inventories decreased at a $26.0 billion annualized rate in the second quarter, subtracting 3.17 percentage points from GDP growth. The drag was more than offset by a smaller trade deficit as a tariff-related flood of imports subsided.

The economy grew at a 3.0% rate last quarter after contracting at a 0.5% pace in the January-March quarter.

Retail inventories increased 0.2%, instead of 0.3% as estimated in an advance report published last mont

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