Highly indebted 'zombie' companies control more than 2 million US jobs
Heavily indebted "zombie" companies happen to control nearly 2.2 million jobs at a time when the U.S. is in a deep employment crisis.
The companies occupy a large swath of American industry, from big conglomerates to the restaurants and bars that have suffered so much during the coronavirus pandemic and the associated social distancing measures that have torn a hole through the U.S. economy. They're generally designated as companies that continue to operate even without the revenue stream to pay off their debts.
At the sector level, they range from the 233,000 jobs in industrial to conglomerates to 738 in the insurance business, according to data compiled by Arbor Data Science. The unemployment rate has surged to 14.7% during the coronavirus crisis as more than 23 million Americans were out of work as of the end of April.
Some of the biggest names have actually found it easier to raise more debt during the present crisis, as a Federal Reserve intervention has breathed new life into the corporate bond market. Their stock prices have also rebounded aggressively.
However, that's also generated some worry in the market that the current rally could be overheating.
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