U.S. Corporate Bankruptcies Reached 71, Surpassing 2020 Levels.

The US economy is experiencing a concerning rise in bankruptcy filings, reaching levels not seen since the COVID-19 pandemic in 2020. A recent report from Business Insider highlights that several well-known brands from the 1990s and 2000s have filed for bankruptcy, signaling potential economic stress. Data from S&P 500 Global indicates that in summer, bankruptcy filings surpassed the 2020 figures, with 71 companies filing last month, eight more than in June.

Notable among these are beloved brands like Forever 21 and Joann. Many retailers are closing stores to cut losses amid declining demand and high operational costs. Despite the US stock market performing relatively well, with a 3% growth in Q2, experts warn that July was challenging, citing issues like rising interest rates, tariff uncertainties, and supply chain disruptions.

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Companies such as Del Monte Foods, a canned goods producer, filed for Chapter 11, citing reduced demand, high inventory costs, and heavy debt, rumored to be between $1 billion and $10 billion. The trend appears to be continuing into August, with prominent brands like Claire’s filing second Chapter 11 petitions, citing low demand and high-interest rates.

These bankruptcies are troubling because many of these brands once dominated the retail market with numerous stores. Now, they are closing physical locations at an alarming rate. The economic struggles are compounded by broader policy discussions, with former President Donald Trump advocating for tariffs on imports, claiming that the revenue from these tariffs could help pay off national debt and stimulate the economy.

Overall, the combination of high debt, declining demand, and uncertain economic policies suggests that the coming months could be challenging for the US economy, reflecting wider financial vulnerabilities.