'Funflation' Hits the US, Making Hobbies Increasingly Expensive

The cost of leisure in the United States is becoming increasingly expensive. However, this situation has not immediately prompted the public to curb their entertainment spending.

On the contrary, US consumers continue to pour money into various recreational activities, ranging from arts and crafts and video games to outdoor activities such as hiking, camping, and diving. This phenomenon is known as ‘funflation’, referring to the rising costs of various entertainment and recreational activities.

According to a recent analysis by Bank of America (BofA), spending on hobbies increased by 7.9% year-on-year in August 2026. This growth is more than double the growth in the number of transactions, which only reached 3.4%. This implies that consumers are not only making more hobby-related purchases but are also spending more per activity.

“Funflation is the rise in the cost of recreational activities visible across various prices, from petrol for vehicles used during the weekend to ice cream during holidays,” said John Gathergood, an economics professor at the University of

Nottingham, UK, as quoted from CNBC International.

Data from the US Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) shows that the recreation index—which includes video and audio, pets and their services, sports equipment, photography, and recreational reading—rose by 2.7% over the 12 months ending August 2026. Meanwhile, sales in sporting goods stores, hobby shops, music stores, and bookstores surged by 10.7% in the 12 months leading up to August. This growth is significantly higher than the increase in total US retail sales and food services, which reached 6% during the same period.

Holidays Becoming More Expensive

One factor driving the change in US consumption patterns is the soaring cost of travel. BofA analysts noted that transaction data shows the growth in hobby spending in recent months is likely linked to a shift in consumption away from travel due to rising fuel costs.

Aviation fuel prices surged following the outbreak of the US-Iran war. According to the International Air Transport Association (IATA) Jet Fuel Price Monitor, jet fuel prices reached approximately US$194 per barrel for the week ending 18 September, a 116% increase compared to the previous year’s average. This rise in fuel costs has also impacted airfares; US government data shows airfares increased by 26.5% year-on-year in August.

“By reducing overseas travel, consumers can free up a significant amount of money to spend on hobbies at home,” said Gathergood.

Dan Wasiolek, a senior equity analyst at Morningstar, stated that the Covid-19 pandemic has accelerated the shift in consumer patterns towards spending on experiences rather than goods. However, the high cost of travel has not entirely stopped Americans from travelling. High-income families continue to travel despite rising prices, and the US public generally still plans to allocate funds for summer travel. A PwC survey of over 2,000 adults in April showed that Americans plan to spend an average of nearly US$2,900 on summer travel, with 71% of respondents expecting their travel expenditure to be the same or higher than the previous summer.

Millennials Spending More on Hobbies

Changes in consumption patterns are also evident across different age groups. BofA analysis found that older Millennials were the group spending the most on hobbies in the three months leading up to August. Spending per consumer in this group was more than double that of Gen Z, which recorded the lowest hobby expenditure.

According to BofA analysts, this suggests that certain generations are likely shifting their spending towards relatively cheaper hobbies, such as arts, crafts, and board games. This shift also reflects the trend of ‘granny core’ activities, such as knitting, sewing, and baking.

Interestingly, spending on video games also increased across almost all age groups. In the 12 months ending August, per capita spending on video games grew significantly. Even Gen Z, which recorded the smallest growth compared to other age groups, still increased its video game spending by 20%.

This phenomenon demonstrates that when the cost of certain recreational activities rises, consumers do not necessarily stop seeking entertainment. Instead, they may redirect their spending towards other activities deemed more affordable, including various hobbies that can be enjoyed from home.