In 2024, corporate bankruptcies were at a 14-year high. This disturbing trend is not letting up, with this same pace continuing in the first seven months of 2025. According to S&P Global data, 446 companies filed for bankruptcy over this period. This would mark the largest total for any seven-month stretch since 2010, when the US was still suffering from the repercussions of the Great Recession.
The alarming rise in corporate bankruptcies reflects broader economic challenges, as various sectors struggle to navigate shifting consumer trends and tightening budgets. The consumer discretionary sector, which includes retail, made up many of 2025’s reported 70 bankruptcy filings by the industrial sector’s 61. These two sectors were the biggest drivers of bankruptcy filings, highlighting the acute financial pressure experienced by businesses operating in these sectors.
Corporate bankruptcies skyrocketed July 2025, hitting a record-high 66 corporate bankruptcies. It was the worst monthly total since July 2020, when governments imposed sweeping shutdowns in a bid to quell the spread of COVID-19. This increase in July came on the heels of a consistent rise from June, which saw the same number of filings. In July alone, three of these companies declared bankruptcy. All of them started the process with at least $1 billion in assets and liabilities.
With corporate bankruptcies near a record high, the American economy is in a scary place. Now, they’re still dealing with stubborn inflation and a shift in consumer behavior. Despite strong overall retail sales activity in the U.S., S&P Global notes that the consumer discretionary sector “has been particularly susceptible to economic headwinds,” attributing this vulnerability to changing buying trends and tighter consumer budgets.
As firms respond to these macroeconomic pressures, monetary policy analysts are considering the optimal policy response. Ryan Swift, a bond strategist at BCA Research, commented on the implications of potential interest rate cuts by the Federal Reserve.
“Yields at the front-end of the Treasury curve would almost certainly come down in any reasonable scenario where the Fed is cutting rates, but the very long end for the 10-year or 30-year is more in doubt,” said Swift. “If yields don’t come down, then there is no economic benefit to borrowers from the rate cuts. But rate cuts could ignite animal spirits and send risk assets higher in the near term.”
These insights highlight the delicate balance policymakers must strike as they consider actions to stimulate economic growth amid rising bankruptcies. Retailers, airlines, and travel companies of all shapes and sizes are suffering financial duress. Beneath some shiny, resilient overall economic indicators lies a looming vulnerability.