Price hikes persist, with demand deteriorating slowly. Companies raise prices to offset higher costs, but this approach pressures consumers already tightening their wallets. Sluggish consumer spending, coupled with rising ongoing unemployment claims, highlights prolonged financial strain.
Initial unemployment claims remain low, possibly reflecting delayed filings or optimism among workers expecting quick reemployment. However, climbing Continuing claims suggest sustained joblessness and deeper market struggles. Prolonged price hikes and weakening demand are compounding these issues.
If rising bankruptcies are joined by increased consumer credit defaults and unemployment, it could signal the onset of a deeper recession or even systemic financial crisis. This economic fragility demands close scrutiny as cracks in stability continue to widen.
The U.S. economy is facing mounting distress, with individual bankruptcy filings up by 14%, reaching 40,110 in September 2024 compared to 35,135 in the same month last year. Total bankruptcy filings—including business and non-business—rose by 16.8% in the twelve-month period ending December 2023, reaching 452,990 filings, compared to 387,721 in the prior year. Non-business filings alone surged by 16%, totaling 434,064 in December 2023, up from 374,240 in 2022.
The corporate world reflects similar signs of strain:
- Red Lobster filed for Chapter 11 in May 2024, closing 99 locations due to financial struggles.
- Fisker Group Inc. entered bankruptcy in June 2024, halting production of its flagship Ocean SUV.
- Chicken Soup for the Soul Entertainment Inc. filed for Chapter 11 in June, citing millions in debts.
- Consulate Health Care LLC sought bankruptcy protection in June, with over $1 billion in liabilities.
- Walgreens closed 150 U.S. stores in 2023 as part of a restructuring plan.
These figures paint a grim picture of the U.S. economy, suggesting growing financial instability across both individual and corporate sectors.
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