Consumers in the U.S. are spending more on hobbies and recreational activities despite rising costs, a trend referred to as “funflation.” According to a recent Bank of America analysis, spending on hobbies such as arts and crafts, outdoor equipment, and related retailers grew by 7.9% year over year in August 2026. This increase in spending outpaced the growth in the number of transactions, which rose by 3.4%, indicating that consumers are both buying more frequently and investing more money into their leisure activities.

This surge in hobby spending is occurring even as the price of recreation rises broadly. The Bureau of Labor Statistics’ Consumer Price Index showed a 2.7% increase over the past year in the recreation index, which includes video games, pets, sporting goods, and books. Sales at specialty stores in these categories jumped 10.7%, outstripping the overall growth of 6% in U.S. retail and food services. Experts suggest that consumers might be substituting home-based hobbies for other leisure activities like travel or dining out, reallocating their budgets in response to inflation and higher costs in other sectors.

Higher fuel prices, exacerbated by geopolitical tensions including the U.S.-Iran conflict, have contributed to steeper travel costs, particularly jet fuel prices which soared 116% compared to last year. This has made airfare substantially more expensive, with ticket prices up 26.5% year over year as of August. Analysts believe that these high travel expenses are leading many consumers to forego trips abroad, freeing up discretionary funds to spend more on hobbies and at-home leisure activities instead.

Demographically, the Bank of America study found that older millennials are the biggest spenders on hobbies, averaging more than twice the expenditure of Gen Z consumers. While Gen Z is still increasing its spending on hobbies like video games by around 20%, older millennials appear to favor lower-cost activities such as arts, crafts, and board games. The trend reflects both a shift in how Americans prioritize leisure and how inflation is reshaping consumer behavior across different generations.