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Bankruptcies in the United States Reach 13-Year Peak Amidst Forecasts of a Major Recession by 'Bond King' Jeffrey Gundlach
January 22, 2024 Ethan Michael

Bankruptcies in the United States Reach 13-Year Peak Amidst Forecasts of a Major Recession by 'Bond King' Jeffrey Gundlach

Last year, corporate bankruptcies in the United States reached a 13-year peak as companies grappled with the challenges of staying afloat amid elevated interest rates and escalating labor costs.

New data from market intelligence firm S&P Global reveals that in 2023, there were a total of 642 bankruptcy filings, marking the highest level since 2010 when 827 bankruptcy filings were recorded.

California led the nation in filings, with 95 firms seeking bankruptcy protection in 2023, followed by Texas with 75 and Florida with 68. New York had 58 filings, while New Jersey documented 31. Several other states, including Massachusetts, Georgia, Nevada, Illinois, North Carolina, and Pennsylvania, reported 15 or more bankruptcy filings.

S&P Global cautions that business conditions are anticipated to remain challenging in 2024 due to the persistently high cost of borrowing capital.

"While investors anticipate the Federal Reserve to cut interest rates as early as March, companies will still face the challenge of dealing with relatively high interest rates and robust wage growth in the near term."

This concern about the future of the U.S. economy is not unique to S&P Global. In a recent episode of the Just Markets Webcast, billionaire "Bond King" Jeffrey Gundlach forecasts a bearish year for the markets in 2024, predicting an economic 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, the founder and CEO of DoubleLine Capital LP, manages an investment firm with $91 billion in assets under management.

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