Companies Are Going Bankrupt at the Fastest Pace Since 2020 Notable June bankruptcies tracked by S&P Global were the electric vehicle maker Fisker and Redbox DVD rental operator Chicken Soup for the Soul Entertainment.

^{This article originally appeared on Business Insider.}

A historic surge of corporate bankruptcies is hitting Wall Street, with this year's volume of filings already above levels seen in the past 13 years, S&P Global Intelligence reported.

According to a Monday report, June notched the highest level of monthly bankruptcies since 2020, when pandemic chaos drove a number of firms out of business. Tacking on last month's 75 filings, this year's total number of bankruptcies rose to 346.

While company-specific issues will often lend a hand towards a business' closure, S&P Global cited high interest rates, supply chain issues, and a consumer spending slowdown as today's major culprits.

When, earlier this year, hope was much stronger for a quick and significant reduction to interest rates, bankruptcies remained more subdued, S&P previously noted.

But bankruptcies started spiking to stand-out levels in April, the ratings agency reported, as it began to dawn on businesses that monetary policy would remain elevated for a while.

As the Federal Reserve has held interest rates at the 5.25%-5.50% level for nearly a year now, some analysts have called the central bank out for risking unnecessary damage to the economy. Bankruptcies aside, other worries include a wave of commercial real estate defaults or fallout in the private credit sector.

"If I were on the Fed, I would have argued for rate cuts at the end of last year," Moody's chief economist Mark Zandi told CNBC on Monday. "I think they're taking an increasing risk of putting too much pressure on the economy, financial system and ultimately, potentially breaking something."

But optimism is back on the rise for an upcoming rate cut, buoyed by recent moderation in both labor and inflation data. While the Fed will continue to reinforce its need to see more evidence of disinflation, Zandi expects a cut in September.

Yet, deteriorating consumer spending is also grinding down on corporate prospects.

While pandemic stimulus set off a shopping spree that lasted across 2023, retail spending has gradually spiraled down: in the three months through June, year-to-year sales volumes fell 1.3%.

That's already weighing down on quarterly earnings reports, and forcing some retailers to become more creative, or face challenging decisions.

For instance, Nike said it would reallocate $1 billion towards "consumer-facing" initiatives, while Walgreens announced the planned closure of over 2,000 underperforming locations.

Among notable June bankruptcies tracked by S&P Global, were the electric vehicle maker Fisker, as well as Redbox DVD rental operator Chicken Soup for the Soul Entertainment.

The consumer discretionary sector is leading in bankruptcies this year, recording 55 total filings. That's followed by healthcare and industrials, S&P Global reported.