Bankruptcies in the US are reaching distressed historical levels only seen during recessions. As you can see in the chart below, the 4 week moving average of companies filing for bankruptcy is at the same level it was during the pandemic when the government created a program to protect small businesses, and it’s slightly below the maximum levels seen during the great financial crisis of ‘08. For many companies, the rapid rate increases by the fed combined with restrictive lending conditions, where banks have significantly slowed down their risk appetite, have been devastating. Most of these companies are small businesses which are reponsible for the majority of job creations in the US. Big companies downsize and reduce their workforce, for smaller ones, it means bankruptcy.
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