From January to April 2023 the USA witnessed around 236 bankruptcy fillings, which is more than double the previous year and the highest since 2011. This is not only a sign of actual stress from higher interest rates along with slower growth but also due to certain corporate s over-leveraging during 2020-2022.
This would impact the future employment data, though the temporary employee count is already at 3,002,700 lowest since October 2021.
It would also lead to higher default rates in the corporate and individual loans. Though the current data has stabilised from the recent rise can be taken more of a pause rather than a reversal.
The combination of these trends might indicate a fall in growth but thanks to services growth rising that fall might be delayed against the estimated timeline.
The problem with higher bankruptcy is that the corporate sector becomes more cautious of new capacity expansion spending. This during a down cycle is alright but when reversal starts within a short time it leads to capacity constrain leading to the next round of inflation.