US corporate bankruptcies in July hit their highest monthly level since 2020. The number of large public and private companies filing for bankruptcy increased from 66 in June to 71 in July. This makes 446 bankruptcy filings for the first seven months of 2025, the most since 2010.

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Economic pressures due to Trump tariffs

In the face of rising interest rates, persistent supply chain issues, and uncertainty surrounding Trump tariff policies, companies continue to face increasing challenges. For the seventh consecutive month in July, the Federal Reserve kept its benchmark interest rate between 4.25% and 4.50%.

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However, due to softer labour market data, market expectations now point to a nearly 90% chance of a rate cut in September. If it affects Treasury yields or investor sentiment, such a cut might lower borrowing costs, which could help financially troubled companies.

Treasury yields and corporate debt costs

Treasury yields, frequently more so than the Fed’s policy rate, are a major factor in determining the cost of borrowing for corporations.

The yield on the five-year Treasury note, which serves as a benchmark for some corporate debts, decreased from 4.38% at the beginning of the year to 3.96% at the end of July.

Despite the drop, yields have stayed above 3% since the middle of 2022, which was uncommon in the 2015–2021 timeframe.

Sector-wise trends

Three companies, including LifeScan Global Corp., Genesis Healthcare Inc., and Del Monte Foods Corp. II Inc., a subsidiary of Del Monte Foods Inc, filed for bankruptcy in July, each with assets and liabilities totalling more than $1 billion at the time of the filings.

Through a restructuring agreement, LifeScan Global, well-known for its OneTouch diabetes management products, hopes to reduce more than 75% of its debt.

With 70 and 61 major company bankruptcies through July, respectively, the industrial and consumer discretionary sectors have been the most severely affected this year.

Eleven industrial and ten consumer discretionary sector filings were made in July alone, demonstrating the ongoing pressure on these sectors.

US bankruptcy filings from 2008 through 2025

Over 5,000 filings annually peaked during the 2008–2009 financial crisis. Filings declined sharply after 2010 and stayed mostly constant, usually between 400 and 800 per year.

But between 2020 and 2024, filings started to increase once more, reaching 688 in 2024. Year-to-date filings as of July 2025 have already surpassed full-year totals from years like 2021 (405) and 2022 (373), marking a significant increase over the same period in previous years.