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Borrowing among consumers grew in August

Oct 17, 2011 Philip Burgess

Consumer borrowing ticked upward in August as student loan approvals soared, according to a report from The Associated Press. Specifically, a panel of economists polled by Fact Set determined that borrowing surged by $8 billion. The figure marks a substantial decrease from July, when borrowing grew by $12 billion, marking the largest increase in more than three years. That month's trends were driven in large part by a surge in auto sales, despite a decline in credit card use. "Economists at Barclays believe the expected borrowing increase in August will mainly reflect further increases in student loans rather than big gains in auto loans because auto sales were flat in August," the AP reports. "Barclays economists are also looking for only a slight increase in credit card use, reflecting modest gains in retail sales during the month." Total consumer borrowing increased to a seasonally adjusted $2.45 trillion in July, only 2 percent above September's four-year low. The readings reflect the slowdown in U.S. market activity, as consumers continue to be racked with fear over high unemployment, a volatile stock market and mounting debt crises in both the U.S. and Europe.