Business inventories rose slightly less than expected in June, suggesting firms remained cautious about future demand at the end of the second quarter.

Inventories climbed 0.3 percent, following a downwardly revised 0.9 percent rise in May, the Commerce Department said on Friday. Economists had expected a rise of 0.5 percent in June.

Inventories are a key component of gross domestic product and the smaller-than-forecast rise in June, coupled with a wider trade deficit that month, suggest the second-quarter growth pace was even slower than the Commerce Department's initial estimate of a 1.3 percent annualized rate.

The ratio between business inventories and sales was unchanged at 1.28, the highest since October.

Business sales increased 0.4 percent after a 0.1 percent dip the previous month.

(Reporting by Pedro Nicolaci da Costa; Editing by Andrea Ricci)