What Failing Industries Reveal About the Economy and American Households

As we move through 2026, the trends that looked like early warning signs last year have now become realized pressure points. Retail collapses, healthcare bankruptcies, and rising farm distress aren’t isolated events; they’re indicators of a financial system where costs are rising faster than income, affecting household budgets.

Updated on April 8, 2026

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Key Takeaways

• Healthcare bankruptcies are accelerating, driven by liability exposure, workforce shortages, and a shrinking nursing pipeline.
• Retail and pharmacy liquidations are reshaping communities, eliminating warranties, deposits, and essential access points as chains like American Mattress and Rite Aid disappear from local markets.
• Legacy manufacturers remain vulnerable to cost shocks, with companies citing tariff‑related input inflation and a weakened housing market that reduced demand for furniture and home goods.
• Even when tariffs are later ruled unlawful, the financial impact on households remains, with prior estimates showing roughly $1,000 in lost purchasing power.
• Consumers are increasingly delaying big‑ticket purchases, repairing what they have, or making do, the “Cubanization” on the U.S. economy.

Healthcare Insolvency: When the Cost of Care Becomes the Cost of Collapse

The bankruptcy of Genesis Healthcare, one of the nation’s largest senior‑care operators, highlights a deeper structural problem in long‑term care. Operating 175 facilities across 17 states, the company wasn’t undone by mismanagement alone. Public filings show tens of millions in liability exposure tied to personal‑injury and wrongful‑death claims, compounded by a nationwide shortage of healthcare workers.

Elder‑care facilities have long relied on immigrant labor, and recent workforce constraints have intensified staffing gaps and increased operating costs. For the 15,000 seniors in these facilities, the 2026 transition to new ownership raises a critical question: Can the business model of elder care survive rising liability costs, stagnant reimbursement rates, and a shrinking labor pool?

When healthcare providers fail, the fallout hits families, insurers, and local economies.

Retail Liquidations: When Stores Disappear, So Do Consumer Protections

The retail sector continues its multi‑year contraction. American Mattress, once a regional staple across the Midwest and Florida, has shifted from restructuring to full liquidation with Chapter 7 bankruptcy, closing half its stores as of March 2026.

Rite Aid’s case followed a similar trajectory: what began as a reorganization ended in a complete wind‑down, leaving entire neighborhoods without accessible pharmacies.

When retailers collapse, consumers lose more than convenience. They lose:

• warranties
• deposits
• gift card value
• access to essential goods and services

We are seeing this with the bankruptcy filings of furniture giants American Signature and Value City Furniture. Besides the economic impact, consumers are left with no protection. In this case, furniture deposits are lost. Buyers will be lucky to receive any returned deposits.  For this reason, I’ve always advocated against large deposits as a source of protection for consumers.

Professor’s Note: If you do have a contract pending with a company that has filed for bankruptcy, make sure to read this article on American Signature furniture to understand the steps you should take to recoup your deposit. This includes filing a Proof of Claim with the bankruptcy clerk’s office.

The Inflation Ladder: Why Prices Rise Faster Than They Fall

Corporate bankruptcies hit a decade‑high in 2025, and early 2026 filings are already outpacing that trend. Economists point to a combination of elevated costs, supply chain volatility, and trade‑related price pressures. Tariffs imposed on key imports from building materials to consumer goods have acted as a pass‑through cost on households.

Once prices rise across essentials like fuel, food, and components, they rarely return to pre‑shock levels. This “inflation ladder” means each rung becomes the new baseline, squeezing both businesses and consumers simultaneously.

Rural America: Debt, Declining Prices, and the 99‑Year Clock

Farm bankruptcies in early 2026 have already surpassed the total filings for all of 2024. Producers are facing a combination of:

• record operating debt;
• falling crop prices;
• rising fertilizer and fuel costs due to the Iran conflict;
• tightening credit conditions.

The closure of Howard Miller Co., a 99‑year‑old Michigan manufacturer, illustrates how fragile legacy industries have become. Leadership cited higher input costs,  including materials affected by tariff‑related price increases, and a weakened housing market that sharply reduced demand for furniture and home goods.

When household budgets are already strained, consumers delay big‑ticket purchases, and that pullback ripples through local economies. I referenced this issue personally with the purchase of my sit‑down lawnmower.

The model I had been tracking was $1,899 last year and is now $1,999. That’s the exact ‘nickel‑and‑dime’ effect I’ve written about before: a few dollars here, a few more there, adding up to thousands by year’s end. It’s also the same consumer behavior I described in my article on the Cubanization of the U.S. economy, when prices rise faster than incomes, people hold back, repair what they have, or find someone who can fix it for less.

I ultimately bought the mower in October, months before I needed it, because the risk of another price increase outweighed the benefit of waiting. Millions of households are making similar calculations, and when enough people delay or downshift their spending, the slowdown hits manufacturers, retailers, and entire local economies.

Howard Miller employed several hundred workers across its manufacturing and distribution operations, meaning the shutdown affects not only employees but also suppliers, transporters, and the small businesses that depend on their spending.

It’s a reminder that rural manufacturing and agriculture often rise and fall together, and when one sector contracts, the financial stress spreads quickly across the community.

The Professor’s Conclusion

Across every sector, healthcare, retail, agriculture, and manufacturing, the pattern is the same: rising costs, shrinking margins, and households absorbing the fallout.

Even with the Supreme Court’s recent ruling that certain tariff actions are unlawful, for consumers, the financial impact has already occurred. Even if a policy is later struck down, the price increases it triggered don’t reverse. That money is already out of household budgets.

Last year, estimates were that tariffs reduced the average household’s purchasing power by roughly $1,000. In my experience, even a gap of that size can be the difference between staying current on bills and defaulting. Once those costs are absorbed into the supply chain, they rarely unwind, leaving families to manage the long‑term consequences.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link.

You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.

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Originally updated on July 15, 2025.