New York, NY – A perfect storm of high-interest rates and waning consumer demand has pushed US corporate bankruptcies to their highest levels since the 2008 financial crisis, according to a new report from S&P Global Market Intelligence.

The data revealed that at least 686 US companies filed for bankruptcy in 2023, marking an 8% increase from the previous year and surpassing the 2010 peak of 828 bankruptcies.

"The combination of rising interest rates and decreasing consumer spending has created a challenging environment for businesses," said [Name], a senior economist at [Institution]. "Companies that rely heavily on consumer discretionary spending have been particularly hard hit."

Notable examples of companies that succumbed to bankruptcy in 2023 include Party City, a popular party supply retailer, and [other notable examples]. These businesses cited soaring costs, inflationary pressures, and declining consumer demand as primary factors contributing to their financial distress.

"Party City's downfall is a microcosm of the broader challenges facing many retailers," said [Name], a retail analyst at [Institution]. "Consumers are simply spending less on non-essential items."

While the Federal Reserve has initiated a series of interest rate cuts to alleviate some of the pressure on businesses and consumers, the central bank has indicated that it will proceed cautiously. The Fed's decision to reduce its projected number of rate cuts from four to two this year reflects ongoing concerns about inflation.   

"While the Fed's actions have provided some relief, the economy is still facing significant headwinds," said [Name], a macro strategist at [Institution]. "The full impact of these rate hikes may not be fully realized for several quarters."

In addition to formal bankruptcies, out-of-court restructurings have also become increasingly common as companies struggle to meet their financial obligations. According to Fitch Ratings, the recovery rate for senior secured creditors of corporate bond issuers with at least $100 million in debt has fallen to its lowest level since 2016.   

"The rise in bankruptcies and out-of-court restructurings is a clear sign that many companies are facing serious financial challenges," said [Name], a senior director at Fitch Ratings. "The outlook for the corporate sector remains uncertain."

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