(Bloomberg). Increasing prices are causing households to borrow money from their friends and family, which is a warning sign.

Some 25.6 million people — more than 10% of all adults — relied on loans from those close to them to meet spending needs, according to the Census Bureau’s latest Household Pulse survey of finances, which covered the period from March 30 to April 11. The figure was higher than the 19.1million that had been reported a year prior, when the question first was asked.

It was most common for Millennials to borrow from friends and family. Nearly 40 million households have a Millennial head, which is almost the same number as Boomers. Yet they only 6.4% of total national wealth while Boomers own more than half. What’s more, many Millennials entered the job market in the long downturn that followed the 2008 crash, and have struggled with mounting student debts.  

The Census Bureau survey also showed how financial strains map onto the country’s racial divides. Black Americans exhibited the highest increase in borrowing from friends and family, rising to 1 in 6 from 1 in 9. A year ago, this was 1 in 6.

It was also evident that those regions seeing the greatest price rises saw higher borrowing rates from friends and family.

Riverside, California saw 16.6% and Atlanta saw 14.9% rise in the share of borrowers — nearly double what was reported a year ago. These areas were among the U.S. metropolitans that experienced the highest inflation rate in the past few months. 

As part of its efforts to quantify the effects of pandemics on the economy and society, the Census Bureau began conducting regular Household Pulse Surveys in May 2020.  In order to expand the data collection, the Bureau has been working with a number of federal agencies. 

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