Graphic of U.S. currency

High interest rates and rising household financial stress continued to drive U.S. companies into bankruptcy in May, according to new data from S&P Global Market Intelligence.

The firm recorded 62 U.S. corporate bankruptcy filings in May, down slightly from 69 filings in the previous month.

However, through the first five months of the year, corporate bankruptcy filings are in line with the same period last year. S&P reported that 275 companies filed for bankruptcy so far this year, compared with 277 through the first five months of 2023.

“The pace of U.S. corporate bankruptcy filings showed little sign of slowing in May amid ongoing struggles related to high interest rates and shifting consumer spending patterns,” it said in a research note.

The consumer discretionary sector led the way in bankruptcies for the month, accounting for almost 20% of filings, as households continue to curb spending amid elevated inflation and high interest rates, S&P said. The sector also leads in year-to-date bankruptcy filings.

“Just three sectors — consumer discretionary, industrials and information technology — accounted for more than 43% of corporate bankruptcies in May,” it said.

Four companies with over US$1 billion in liabilities sought bankruptcy protection in May, pushing the year-to-date total for these large bankruptcy filings to 17.

For all of 2023, there were 22 filings with liabilities of over US$1 billion, S&P noted.