Private credit growth: the credit impulse and credit acceleration
Updated 2026-09-27
Economies run on new borrowing. When private debt keeps growing but that growth slows sharply, spending that was financed by new credit disappears. This monitor tracks how fast US private debt is growing, whether that growth is braking, and how heavy the existing debt load is to carry.
What is the credit impulse?
The credit impulse is the change in private non-financial debt (households and businesses) as a share of GDP. If private credit rises from 150% to 151% of GDP in a quarter, the impulse is +1 percentage point. The idea, associated with the economist Steve Keen, is that new lending adds to spending in the economy, so what matters for demand is not the stock of debt but how fast it is changing.
What is credit acceleration, and why does it matter?
Credit acceleration is the change in the credit impulse: whether borrowing is speeding up or slowing down. A sharp negative reading means new credit is braking hard, which has come before or alongside past US downturns. Because each economy's normal swings differ, the monitor also expresses acceleration as a z-score: how many standard deviations the latest reading sits from its own history.
What is the debt service ratio?
The Bank for International Settlements' debt service ratio is interest plus principal payments as a share of income for the private non-financial sector. Where the credit impulse tracks how fast debt is changing, the debt service ratio tracks how heavy the existing load is. The monitor compares it with its long-run average.
Warning levels
| Measure | Rule |
|---|---|
| Credit acceleration | Quarterly credit acceleration: yellow ≤ −0.5, orange ≤ −1.0, red ≤ −2.0 pp/qtr. The Credit card uses the worse of this and the z-score. |
| Acceleration z-score | Credit acceleration vs. its own history (z-score): yellow ≤ −1.0, orange ≤ −1.5, red ≤ −2.0. The Credit card uses the worse of this and credit acceleration. |
| Debt service ratio | Debt service ratio vs. its long-run average: yellow ≥ +0.5, orange ≥ +1.0, red ≥ +1.5 pp (the pre-2008 peak was +1.6). |
Data sources
- Federal Reserve Z.1 Financial Accounts (the default, via FRED): household debt (CMDEBT) plus non-financial business debt (TBSDODNS), divided by nominal GDP (GDP). Usually available about 2½–3 months after quarter-end.
- BIS total credit to the private non-financial sector (QUSPAM770A, CRDQUSAPABIS): the same scope on the BIS's cross-country methodology, published later.
- BIS debt service ratio for the US private non-financial sector, quarterly from 1999.
Limits
This is quarterly data published with a lag, so it describes slow structural build-up rather than what markets are doing this week. That is why it is not part of the daily headline answers; the market stress and liquidity and labor signals cover that. The thresholds are simple published rules, not a validated forecasting model.
The free members' private credit dashboard shows every measure above with its current value, direction, signal and chart, plus replays of past crises and CSV downloads. See today's combined reading on the home page.