U.S. Business Bankruptcies Surge to Levels Not Seen in Over 13 Years

The U.S. business landscape is looking increasingly grim as we enter the second half of 2024.

New data from S&P Global Market Intelligence shows corporate bankruptcies have surged to levels not seen in over a decade.

In June alone, 75 companies filed for bankruptcy, pushing the first-half total to 346.

That’s the highest number in 13 years, raising serious questions about the effectiveness of current economic policies.

“High interest rates, supply chain issues and slowing consumer spending continue to weigh on struggling companies,” S&P reported.

These challenges seem to be direct consequences of the Biden administration’s economic approach, often dubbed “Bidenomics.”

The consumer sector is feeling the heat most intensely.

So far this year, 55 consumer discretionary companies have gone bankrupt, with 16 throwing in the towel in June alone.

This trend suggests that despite official claims of economic recovery, many Americans are tightening their belts.

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Healthcare and industrial sectors aren’t faring much better, each reporting 40 bankruptcies in 2024 to date.

June saw nine industrial firms and seven healthcare providers file for protection, indicating the economic strain is widespread.

S&P’s report notes that this bankruptcy pace “accelerated from the first months of 2024 and is rivalled by only the busiest months in 2020, when the shock from Covid-19 pushed a relatively higher number of companies into bankruptcy.”

It’s a sobering comparison โ€“ today’s economic woes aren’t from a pandemic, but from policy choices.

The Federal Reserve’s aggressive interest rate hikes, aimed at curbing inflation, have made it harder for companies to manage debt or get new funding.

At the same time, ongoing supply chain issues, worsened by current trade policies, continue to cause headaches for businesses.

As we move further into 2024, these rising bankruptcy numbers are a red flag.

They suggest that Bidenomics, which promised to build the economy “from the middle out and the bottom up,” might be falling short of its goals.

To turn things around, we may need to rethink our economic strategy.

Less government intervention and more focus on creating a business-friendly environment could be key.

This might mean cutting red tape, embracing market-driven solutions, and giving companies more room to grow and innovate.

The mounting bankruptcies are sending a clear message: our economy is under stress.

Without some serious policy shifts, we could be in for even rockier times ahead.

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It’s time for less talk and more action to get American businesses back on solid ground.