Bankruptcies declared by businesses in the U.S. rose nearly 50 percent in May, as the economy continues to feel the sting of the coronavirus pandemic.
In May alone, 722 businesses across the country filed for Chapter 11 bankruptcy, according to legal-services firm Epiq Global, The Wall Street Journal says. That's up 48 percent from May 2019, when 487 businesses filed papers seeking Chapter 11 protections.
Since March and the onset of the pandemic, the U.S. economy has taken a nosedive, shedding over 40 million jobs and ballooning the country's unemployment rate.
Some good news came Friday morning, when the Bureau of Labor Statistics announced in a huge surprise that the economy added jobs in May and that the unemployment rate fell.
Congress has passed multiple coronavirus stimulus packages adding up to trillions of dollars, but many industries such as service and airlines are still struggling to regain their footing.
“Hotels are not going to bounce back quickly. You’re going to see a long-term effect on office space,” Deborah Williamson, a San Antonio bankruptcy lawyer, told the Journal. “The consequence of the quarantine around the world ... it’s not going to magically go away as you reopen.”