The recovery is beginning to look stalled on the durable goods front. For the second consecutive month new orders have declined. In June, they were down by 1.0%, according to the Census Bureau. This was clearly worse than the 1.0% rise that economists predicted. For six months straight inventories for manufactured durable goods has grow. They were up by 0.9% in June. These trends aren't signs of a healthy economy.

The pictures tell the story here. First, the new orders of durable goods:

durable goods 2010-06.gif

You can see that April was more of a blip. Orders have declined since then. With orders down, it's probably not surprising that inventories are up:

total inventory durables 2010-06.PNG

This shows that demand is weak, as supply is growing. As the stock of durable goods grows, there will be less reason for these manufacturers to ramp up hiring in the near term. Instead, they can just liquidate their inventories when demand picks up.

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