Corporate bankruptcies in the United States hit a 13-year high last year as companies struggled to stay afloat amid high interest rates and rising labor costs.
New data from market intelligence firm S&P Global shows 2023 saw a total of 642 bankruptcy filings – the highest level since 2010 when there were 827 bankruptcy filings.
According to S&P Global, California recorded the most filings across the country with 95 firms seeking bankruptcy protection in 2023, followed by Texas with 75 and Florida with 68. New York witnessed 58 filings last year while New Jersey documented 31. Other states that had 15 or more bankruptcy filings include Massachusetts, Georgia, Nevada, Illinois, North Carolina and Pennsylvania.
S&P Global warns that business conditions will remain tough in 2024 as the cost to borrow capital remains high.
“Although investors expect the Federal Reserve to cut interest rates as early as March, companies will still have to contend with relatively high interest rates and robust wage growth in the near term.”
S&P Global is not the only one sounding an alarm over the prospects of the US economy in the year ahead. In a new episode of the Just Markets Webcast, billionaire “Bond King” Jeffrey Gundlach predicts that 2024 will be a bearish year for the markets as he expects the economy to enter a period of contraction.
“I think 2024 will be a year of high volatility: starting with declining rates, then recession, then recession response. DoubleLine is ready and loaded for bear.”
Gundlach is the founder and CEO of DoubleLine Capital LP, an investment firm with $91 billion in assets under management.
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