‘Fanflation’ makes hobbies more expensive, but consumers spend money anyway

Entertainment in America is becoming more expensive, but consumers are willing to splurge anyway and seek out a wide range of experiences from outdoor activities to video games.

Bank of America’s latest analysis suggests that “funflation” (the increasing cost of enjoyment) may be rising, but consumers aren’t saving money.

In fact, spending on hobbies, from arts and crafts and hobby shops to retailers selling skiing, hiking, camping and scuba diving equipment, increased 7.9% year over year in August 2026, according to the bank.

This is double the actual transaction growth (up 3.4%) and means consumers are buying more hobbies overall and spending more on them.

John Gathergood, an economics professor at the University of Nottingham, told CNBC: “Funflation is the rising cost of leisure activities, and we see it in everything from the price of gas in your car on the weekend to the price of ice cream on a holiday.”

The recreation index, which includes video and audio, pets and pet services, sporting goods, photography and recreational reading, rose 2.7% in the 12 months through August, according to the latest Consumer Price Index data from the U.S. Bureau of Labor Statistics.

Meanwhile, sales at sporting goods stores, hobby stores, music stores and bookstores rose 10.7% in the 12 months ending in August, outpacing the 6% increase in total U.S. retail and food service sales over the same period, according to the U.S. Census Bureau’s Advance Monthly Retail Trade Report.

“When prices rise, consumers may take advantage of other activities,” Gathergood said. “More hobbies at home may replace vacations. If people cook more meals at home instead of eating out, people may spend more on hobbies, but less on other activities that replace hobbies.”

Analysts at BofA said the bank’s card data suggests that the growth in “hobby spending” in recent months may be due to people balancing “a shift away from travel due to higher prices due to higher fuel costs” after jet fuel prices skyrocketed in the wake of the U.S.-Iran war. Their analysis excluded travel from the hobby category.

Jet fuel prices for the week ending Sept. 18 were $194 per barrel, an increase of 116% from the previous year’s average, according to the International Air Travel Association’s Jet Fuel Price Monitor.

U.S. airfares rose 26.5% from a year earlier, according to federal data in August.

“By cutting back on international travel, consumers are freeing up significant cash to spend on hobbies at home,” said Gathergood of the University of Nottingham.

Dan Wasiorek, senior equity analyst at Morningstar, told CNBC that the coronavirus pandemic has accelerated the shift to “spending on experiences, not ‘stuff’,” even as it has weighed on consumer confidence and savings.

Wasiorek noted that high-income households continue to travel despite the high costs, and that the average American also says he will spend more on travel during the summer.

A PWC survey of more than 2,000 adults in April found that they planned to spend an average of nearly $2,900 on summer vacations. About 71% of respondents said they expected to spend the same amount or more than last summer.

BofA’s analysis found that older millennials spent the most on hobbies in the three months ending in August, more than twice as much per consumer as Gen Z, the generation identified by BofA as the lowest spenders.

“To us, this suggests that these generations may be drawing most of their spending toward cheaper hobbies such as arts, crafts, and board games,” the analysts wrote. “This may also reflect a shift towards more ‘grandmother-core’ activities such as knitting, sewing and baking.”

BofA’s analysis found that video game spending per person increased significantly across age groups in the 12 months ending in August, with even Gen Z, the generation with the smallest increase, spending more than 20%.