Amid ongoing financial strains, U.S. corporate bankruptcies hit their highest mark since the global financial crisis in 2024, according to S&P Global Market Intelligence.
Total bankruptcy filings for the year reached 694, topping the 638 companies that faced insolvency in 2020 amid the onset of the Covid-19 pandemic, S&P said in a report on Tuesday. Last year’s total is the highest since 2010.
“Businesses continued to face pressure in 2024 from elevated interest rates, especially as total debt among credit-rated non-financial U.S. companies reached a quarterly record of US$8.45 trillion and interest coverage remained weak in the third quarter of the year,” the firm said.
In December, there were 61 bankruptcy filings by U.S. companies — led by the consumer discretionary and industrials sectors, which each accounted for nine bankruptcies. For the full year, the two sectors combined saw a total of 196 bankruptcy filings, the report noted.
“The consumer discretionary sector has been particularly susceptible to economic headwinds, even with strong overall U.S. retail sales activity, as consumer buying trends have shifted and budgets have tightened due to inflation,” S&P said.
While the U.S. Federal Reserve began lowering interest rates in the fourth quarter, “the central bank’s monetary easing may slow in 2025,” the firm said.