Everything is not going well with the economy in America. Inflation is also rising rapidly here, while the economy seems to be slowing down. Now a data has been shared by S&P Global, which states that in the first 8 months of the year 2024, 452 companies have applied for bankruptcy in the US. This means that 452 companies have gone bankrupt in the US. This data is the highest after 2020.
During the Covid pandemic, 466 companies went bankrupt in the first eight months of 2020. This is the second highest number in the last 14 years when such a large number of companies have gone bankrupt in America. This year, the highest number of 63 companies went bankrupt in August, while 49 companies closed their business in July.
The month of August has been the third worst month of this year for US industry. According to S&P Global Market Intelligence, the highest number of companies went bankrupt in June this year, 72, while 68 companies went bankrupt in April.
Why are companies struggling in America?
Companies in the world’s largest economy are struggling this year due to many reasons. This includes high interest rates and geo-political uncertainty. However, according to the Bureau of Economic Analysis released on August 29, the US economy has just proven its resilience and real GDP is growing at an annual rate of 3% in the second quarter compared to the first quarter.
These three companies had the highest liabilities
Three bankruptcy filings in August involved companies that had more than $1 billion in liabilities at the time of their initial filing. They included solar technology and energy services provider SunPower Corp, perfume and cosmetics wholesale distributor & International Operations Inc and gas station and convenience store operator SQRL Service Stations LLC. SunPower is publicly listed, while Avon and SQRL are private.
Most of the companies went bankrupt from here
This year, the most affected sector was the consumer discretionary sector, from where 69 big companies closed their business. After this, the business of 53 companies from the industrial sector came to a standstill. 45 companies from the healthcare sector closed down, while 25 companies from the consumer staples sector closed down. The least affected sector was the utility sector, where only 3 companies went bankrupt.
US economy in deep trouble!
In such a situation, it is not difficult to guess that the US economy is facing a serious crisis this year. The rising rate of bankruptcy, fear of recession and increase in unemployment shows that the situation in America is worrying. In such a situation, if the situation does not improve, it can lead to economic instability for a long time. To strengthen the US economy again, steps related to economic reform need to be taken.
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