Media365
From gaming and arts and crafts to hiking and outdoor activities, Americans are spending more on leisure despite rising costs. Here’s what “funflation” means and why consumers are still making room for hobbies.
Inflation is making everyday goods and services more expensive. “Funflation” is essentially inflation for leisure, the rising cost of entertainment, hobbies, travel, recreation and other activities people spend money on for enjoyment.
That could mean paying more for a holiday, a weekend activity, sporting equipment, video games, books or even supplies for hobbies such as painting and crafts. But there is an interesting twist: higher prices are not necessarily stopping people from spending on fun.
Hobby spending is rising
A Bank of America analysis found spending on hobbies, including arts and crafts, outdoor activities and hobby shops, rose 7.9 per cent year-on-year in August 2026.
That was more than double the 3.4 per cent increase in transactions, suggesting consumers were not just making more purchases but were also spending more on each purchase.
US Census Bureau data showed sales at sporting goods, hobby, musical instrument and book stores increased 10.7 per cent over the year through August, compared with a 6 per cent rise in overall retail and food-services sales.
Why are people still spending?
One explanation is substitution. When certain forms of entertainment become too expensive, consumers may shift their spending rather than eliminate it altogether. A costly foreign holiday could be replaced by hiking, camping, gaming or a hobby at home.
More from BusinessTravel is a particularly important example. US airfare prices were up 26.5 per cent year-on-year in August, while higher fuel costs have added to the pressure on travel budgets.
So, instead of spending thousands on a trip, consumers may be choosing activities that offer entertainment closer to home.
Millennials vs Gen Z
Bank of America found that older millennials spent the most on hobbies in the three months through August, spending more than twice as much per consumer as Gen Z.
The data also pointed towards growing interest in relatively affordable hobbies such as arts, crafts, board games, knitting, sewing and baking.
Video-game spending increased across age groups too, with Gen Z recording a 20 per cent rise in per-person spending.
The bigger picture
“Funflation” does not necessarily mean consumers are becoming richer or spending more everywhere. It shows how spending patterns can change when leisure becomes expensive. People may still want to have fun, they are simply finding different, and sometimes cheaper, ways to do it.
