US Corporate Bankruptcies Reach a 13-Year Peak in 2023
Last year, corporate bankruptcies in the US hit a 13-year high due to challenges faced by companies in staying afloat amidst high interest rates and increasing labor costs. Market intelligence firm S&P Global’s latest data reveals that there were a total of 642 bankruptcy filings in 2023, the highest level since 2010.
California recorded the highest number of filings across the country with 95 firms seeking bankruptcy protection in 2023. Texas followed with 75 filings, while Florida had 68. New York and New Jersey witnessed 58 and 31 filings, respectively. Other states with significant bankruptcy filings include Massachusetts, Georgia, Nevada, Illinois, North Carolina, and Pennsylvania.
Tough Business Conditions Expected in 2024
S&P Global warns that businesses will continue to face challenging conditions in 2024 due to high borrowing costs. Despite expectations of interest rate cuts by the Federal Reserve starting in March, companies will still have to contend with relatively high interest rates and substantial wage growth in the near term.
Bond King Jeffrey Gundlach Predicts Recession
Jeffrey Gundlach, known as the “Bond King,” predicts that the US economy will enter a period of contraction in 2024. In an episode of the Just Markets Webcast, Gundlach anticipates a bearish year for the markets with high volatility, declining rates, recession, and recession response. His investment firm, DoubleLine Capital LP, is prepared for these challenging times.
Hot Take: US Economy Faces Recession as Corporate Bankruptcies Soar
Last year’s surge in corporate bankruptcies in the US indicates the challenges faced by businesses amid high interest rates and rising labor costs. S&P Global’s data reveals that 2023 witnessed the highest number of bankruptcy filings in over a decade. The situation is expected to persist in 2024 as borrowing costs remain high. Additionally, Jeffrey Gundlach, known as the “Bond King,” predicts a massive recession ahead. His warning aligns with concerns about the US economy entering a period of contraction. These developments highlight the need for businesses to navigate tough conditions and plan accordingly.
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