American consumers are paying more for leisure and entertainment, yet their enthusiasm for spending shows little sign of cooling. As travel costs continue to climb, at-home pursuits such as outdoor sports, video games, and crafts are becoming new growth drivers for consumption, fueling a phenomenon known as "funflation."
According to CNBC, the latest analysis from Bank of America shows that in August 2026, US consumer spending on hobbies rose 7.9% year-on-year, well above the 3.4% increase in actual transaction counts, meaning the growth came not only from more purchases but also from larger amounts spent per transaction. Data from the US Census Bureau likewise shows that over the past 12 months, sales of sporting goods, hobby items, musical instruments, and books rose 10.7% year-on-year, significantly outpacing the 6% increase in total US retail and food services sales.
One important factor behind this trend is the rise in travel costs. With airfares climbing sharply, some US consumers have begun shifting budgets originally earmarked for travel toward at-home entertainment and hobby spending. For retailers of sporting goods, games, and handicrafts, this means consumer demand is undergoing a structural shift.
Travel gets pricier, at-home hobbies absorb the budget
Bank of America's analysis notes that the recent acceleration in hobby spending is clearly linked to higher travel costs. Data from the International Air Transport Association shows that in the week ending September 18, the global average jet fuel price rose to around $194 per barrel, a sharp increase from a year earlier; data from the US Bureau of Labor Statistics shows that US airfares rose 23.4% year-on-year in August.
John Gathergood, a professor of economics at the University of Nottingham in the UK, said that when a certain type of consumption becomes more expensive, consumers may substitute between different activities—for example, cutting back on overseas travel and dining out while increasing spending on at-home hobbies and home-cooked meals.
It is worth noting that Bank of America did not include travel when tallying hobby spending, so the 7.9% increase mainly reflects growth in non-travel leisure consumption. This means rising travel costs do not necessarily directly squeeze the entire leisure spending budget; part of the spending may simply have shifted from "going out" to "staying in."
Beyond higher prices, willingness to spend persists
"Funflation" is not driven purely by rising prices. Data from the US Bureau of Labor Statistics shows that as of August, the CPI for recreation-related items rose 2.7% year-on-year, lower than the 7.9% increase in hobby spending, indicating that consumer demand itself is also growing.
Dan Wasiolek, a senior equity analyst at Morningstar, said the pandemic accelerated consumers' shift from buying physical goods to spending on experiences, and this trend is still continuing. A survey of more than 2,000 adults conducted by PwC in April this year showed that respondents planned to spend an average of nearly $2,900 on travel this summer, with 71% expecting their spending to be flat or higher than the previous year.
In terms of age, Bank of America data shows that in the three months through August, older millennials had the highest per-capita hobby spending, more than double that of Gen Z; Gen Z was the lowest-spending group among all age cohorts. Bank of America analysts believe this may be related to increased spending on low-cost hobbies such as arts, crafts, and board games.
Video games, meanwhile, show a cross-generational growth trend. In the 12 months through August, per-capita video game spending rose markedly across all age groups, and even Gen Z, which had the smallest increase, saw spending rise 20% year-on-year.
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