Despite the rising costs of recreational activities, a trend termed ‘funflation,’ American consumers are significantly increasing their spending on hobbies, according to a Bank of America analysis. This surge in hobby-related purchases, which grew 7.9% year-over-year in August 2026, appears to be a compensatory behavior as soaring travel costs, particularly airfares due to high jet fuel prices, deter consumers from expensive getaways. While older millennials lead the spending, even Gen Z is increasing their outlay on activities like video games, indicating a broader societal shift towards experiences over goods, even at higher price points.
It's becoming increasingly expensive to pursue recreational activities in America, a phenomenon dubbed 'funflation.' Yet, despite these rising costs, consumers are continuing to spend, seeking out experiences ranging from tranquil arts and crafts to thrilling outdoor adventures and immersive video games.
A recent Bank of America analysis indicates that while 'funflation'—the escalating price of leisure—is indeed on the rise, consumers are not curtailing their spending habits. In fact, expenditures on hobbies, which encompass everything from arts and crafts supplies and specialty hobby shops to gear for skiing, hiking, camping, or scuba diving, witnessed a robust 7.9% year-over-year increase in August 2026, according to the bank's data. This growth significantly outpaced the 3.4% rise in the number of transactions, signaling that consumers are not only engaging in more hobby-related purchases but also spending more on each activity.
John Gathergood, an economics professor at the University of Nottingham in the U.K., elaborated on the concept, telling CNBC, "Funflation is the escalating cost of leisure activities, which is seen across prices from gas for weekend cars to ice creams on holiday."
Supporting this trend, the latest Bureau of Labor Statistics' Consumer Price Index revealed that the recreation index, which includes categories like video and audio equipment, pet services, sporting goods, photography, and recreational reading, climbed 2.7% over the 12 months ending in August.
Furthermore, sales at establishments specializing in sporting goods, hobbies, musical instruments, and books surged by 10.7% in the year through August. This growth handily outperformed the 6% increase observed in total U.S. retail and food-services sales during the same period, as reported by the U.S. Census Bureau's Advance Monthly Retail Trade Report.
Gathergood also suggested a potential shift in consumer behavior: "When prices rise, consumers might substitute between activities. More hobbies at home might replace holidays away. More food made at home might replace eating out. So, people may be spending more on hobbies, but are spending less on other activities the hobbies are replacing."
Travel Costs Soar, Redirecting Spending
Bank of America analysts hypothesize that the recent surge in 'hobby spending' might be linked to consumers shifting away from travel due to skyrocketing prices, largely driven by escalating fuel costs exacerbated by the U.S.-Iran conflict. Their analysis notably excluded travel from its hobby categories.
Jet fuel prices recently stood at $194 per barrel for the week ending September 18, marking a staggering 116% increase from the previous year's average, according to the International Air Travel Association's Jet Fuel Price Monitor.
Federal data from August indicates that U.S. airfare prices have jumped 26.5% year-over-year.
"By foregoing travel abroad, consumers can free up substantial amounts of cash to spend on hobbies at home," Gathergood noted.
Dan Wasiolek, a senior equity analyst at Morningstar, told CNBC that the COVID-19 pandemic accelerated a broader societal shift towards "spending on experiences rather than 'things,'" even as consumer confidence and household savings face mounting pressure. Wasiolek also observed that higher-income families have continued to travel despite the increased expenses, and a significant portion of average Americans also planned to prioritize travel during the summer season.
According to an April PWC survey of over 2,000 adults, consumers intended to spend an average of nearly $2,900 on summer travel. A striking 71% of respondents anticipated spending the same amount or more than the previous summer.
Generational Spending Habits: Gen Z vs. Millennials
The Bank of America analysis also shed light on generational spending patterns, finding that older millennials allocated the most funds to hobbies in the three months leading up to August. Their per-consumer spending was more than double that of Gen Z, identified by BofA as the cohort spending the least on hobbies.
The analysts suggested, "To us, this suggests that these generations are likely gravitating most of their spending toward less expensive hobbies like arts, crafts, and board games. It's also possible that this reflects a shift to more 'granny core' activities like knitting, sewing, or baking."
Interestingly, the BofA analysis also revealed significant growth in per-person video-game spending across all age groups over the 12 months to August. Even for Gen Z, the generation with the smallest increase, spending on video games still rose by a notable 20%.
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