Plus: Bankruptcy returns | Friday, January 17, 2025
View in browser
Axios Markets
By Emily Peck and Felix Salmon
·
Jan 17, 2025
🏖️ Happy Friday! Today we consider a puzzling question: If diversity is good for businesses — and the public doesn't mind — why are so many companies running away from it? Plus: The case for more bankruptcies, and Trump skepticism at the grocery store. ⏰ We'll be off Monday but back in your inboxes Tuesday! All in 1,040 words, a 4-minute read.
1 big thing: Americans are fine with corporate DEI
By Emily Peck
Data: Harris/Axios Vibes Poll. Chart: Axios Visuals A majority of Americans across nearly all demographic groups said DEI initiatives have made no impact on their personal careers, according to a newly released Harris Poll/Axios Vibes survey. Why it matters: Republican lawmakers and activists have vilified DEI, a term for diversity, equity and inclusion policies used by employers. Companies have responded by rolling back programs. Yet Americans — and businesses — have a generally positive to at least indifferent view on the subject. On balance, most demographic groups were more likely to say DEI benefited their career than hindered it. Zoom out: The current enmity for DEI was on display this week in the congressional hearings for President-elect Trump's Cabinet nominees. At Pete Hegseth's hearing, the Defense secretary nominee railed against DEI, as did some lawmakers. DEI is "race essentialism," Sen. Eric Schmitt (R-Mo.) said. "I think the American people have spoken loudly and clearly about this." Trump's opposition to anything DEI-related is well known . By the numbers: While 41% of those surveyed said they support efforts to roll back diversity initiatives, the majority — nearly six in 10 — either oppose those efforts or are unsure about them. 57% said DEI initiatives have had no impact on their career, while 16% explicitly said it's hindered them. 39% of Democrats said they've benefited from DEI, compared to 26% of Republicans. At least half of all demographic groups — including people of different races, ethnicities and sexual orientations — said DEI had no impact on their careers. 51% of respondents said DEI is primarily a symbolic gesture, while the rest said it is essential for equality. The big picture: There is broad support for the idea of diversity inside companies. 61% of those surveyed said diverse employees have a positive impact on organizations, and 75% agreed that more needs to be done to guarantee everyone is advancing. Between the lines: Even as they feverishly cut programs, business leaders appear to have good feelings about DEI, according to a separate survey out this week. Nearly three-quarters of 3,200 global CEOs and business leaders said initiatives tied to social issues — such as diversity and inclusion — have had a positive impact on their company's economic performance, per the AlixPartners Disruption Index . 94% of executives whose companies lead their industries in growth and profitability view diversity and inclusion as a competitive advantage. The bottom line: There is a big disconnect between political rhetoric and reality.
- The return of bankruptcy, thanks to the Fed
By Felix Salmon
Data: U.S. Courts. Chart: Axios Visuals If capitalism without bankruptcy is like Christianity without hell, as former astronaut and Eastern Airlines CEO Frank Borman famously put it, then the U.S. over the past decade or so has been a joyous church indeed. Why it matters: We're now beginning to see signs that the days of very few bankruptcies might be coming to an end, thanks in large part to the Fed. How we got here: The financial crisis of 2008 to 2009 saw a sharp rise in bankruptcies, as you'd expect. It also caused the Fed to cut interest rates to zero and to keep them there for many years. It led bank regulators to get stricter about the amount of risk they allowed banks to take on, even as borrowers also started to get worried about the consequences of having too much debt. The result was a years-long decline in bankruptcy filings, as smaller debts became easier to refinance in an easy-money era. Where it stands: A recent uptick in the numbers suggests that era might have ended with the Fed rate hikes of 2022. As CEA chair Jared Bernstein told Axios, "we know this variable is pretty highly elastic to rate rises." The big picture: Bankruptcy — a process that wipes out debts and allows fresh starts — is a necessary part of any dynamic economy. Fewer bankruptcies isn't always a good thing. It can be a sign of excessive risk aversion on the part of both lenders and borrowers, a paucity of what John Maynard Keynes characterized as "animal spirits." As University of Illinois law professor Robert Lawless noted, bankruptcy filings are not a good measure of the health of the economy. "Note how bankruptcies declined as the economy went into recession in the early 2000s," he said of the chart above. By the numbers: Bankruptcy filings by companies with assets or liabilities greater than $2 million if they're public (or $10 million if they're private) rose to 694 in 2024. That's up 9% from 2023 and up a whopping 87% from a record low of 372 in 2022, per S&P Global . Overall, business bankruptcies in U.S. courts rose to 22,762 in 2024, up 33% from 2023 and up 73% from 2022. Those numbers are less precise than they seem, since the default setting on most bankruptcy-filing software is "consumer" rather than "business" and many business filers don't check that box. Meanwhile, many large corporate bankruptcies involve simultaneous filings from hundreds of subsidiaries, which can result in the numbers being exaggerated. Between the lines: The absolute number of bankruptcies is still low, even after the recent increases. In 1997, for instance, there were 54,252 business bankruptcy filings, and 6.1 million business establishments in the U.S., for a ratio of 0.9%. By 2024, that ratio had fallen to 0.3%. The bottom line: When rates rise, they bite harder. But an economy with more bite isn't always a bad thing.
A message from Axios
Your guide to the transition in power
AM Executive Briefing gives you direct access into the insights and conversations of Axios CEO Jim VandeHei and co-founder Mike Allen.
Navigate the change in power that will impact you and your team with actionable takeaways from virtual briefing calls with Jim and Mike.
Join AM Executive Briefing.
- Americans are doubting Trump's grocery magic
Data: AP-NORC Poll . Chart: Axios Visuals Most Americans have little to no confidence that Trump can lower the price of groceries and other basic necessities in his second White House term. Why it matters: It's a fundamental disconnect of the early Trump 2.0 presidency — his victory caused a surge in consumer confidence, but consumers are skeptical he can actually solve their biggest concerns. By the numbers: A new AP-NORC poll of 1,147 adults conducted Jan. 9 to 13 asked how confident people were Trump could address various issues . 61% said they were only "slightly" or "not at all" confident that he could lower the cost of food and groceries this year. That uncertainty rose to 64% for housing costs and 65% for health care costs. The intrigue: Trump campaigned aggressively on inflation and specifically promised to lower grocery prices . Since winning, he's changed his message, acknowledging it's hard to lower a price that's already gone up.
A message from Axios
Your guide to the transition in power
AM Executive Briefing gives you direct access into the insights and conversations of Axios CEO Jim VandeHei and co-founder Mike Allen.
Navigate the change in power that will impact you and your team with actionable takeaways from virtual briefing calls with Jim and Mike.
Join AM Executive Briefing.
Thanks to Ben Berkowitz for editing and Anjelica Tan for copy editing. Have a great long weekend!
Why stop here? Let's go Pro. Join the thousands of professionals using Axios Pro to keep up with the companies, deals and trends changing their industries.
Axios thanks our partners for supporting our newsletters.
Sponsorship has no influence on editorial content.
Advertise with us .
Axios, PO Box 101060, Arlington VA 22201
You received this email because you signed up for newsletters from Axios.
To stop receiving this newsletter, unsubscribe or manage your email preferences .
Was this email forwarded to you?
Sign up now to get Axios in your inbox.
Follow Axios on social media: