A new report from the Bank of America Institute reveals that American consumers are spending more on their hobbies, but are also facing higher prices, a phenomenon the report refers to as 'funflation' [1]. Bank of America card data indicates that spending on hobbies increased by 7.9% year over year in August, which is twice the rate of the 3.4% growth in transactions during the same period [1]. This marks a reversal from August 2025, when transaction growth outpaced spending by nearly a percentage point [1]. The report notes that spending growth on hobbies also outpaced transactions during the pandemic [1].
The Bank of America Institute suggests that consumers initially splurged on hobbies during the pandemic due to social distancing, then shifted toward more expensive leisure activities like travel in 2022 and 2023. However, as after-tax wage growth slowed, there was a rotation back to less expensive leisure activities, including hobbies, in the past year [1]. Recent months have seen an acceleration in hobby spending, possibly as consumers move away from travel due to higher fuel costs [1].
The report highlights a generational divide in hobby spending. Older millennials are spending the most on hobbies, followed by baby boomers and Gen X, with Gen Z spending the least. The Bank of America Institute attributes older millennials' higher spending to the likelihood of having young children, leading to expenditures on both their own and their children's hobbies [1]. Data from the Census Bureau's American Time Use Survey shows that older millennials have just over four hours of leisure time per day on average, suggesting their hobby spending may be split between themselves and their children [1].
Younger millennials and Gen Z, while spending less on hobbies overall, have a higher share of their population making hobby-related purchases, often gravitating toward less expensive activities such as arts, crafts, and board games [1]. The report also notes that younger and older millennials, as well as Gen X, are increasing their hobby spending, while baby boomers and Gen Z are slowing theirs. Gen Z's hobby spending showed near zero transaction growth [1].
CONCLUSION
The Bank of America Institute's report underscores a notable increase in hobby spending among American consumers, despite rising costs. Generational differences are evident, with older millennials leading in spending, while Gen Z and baby boomers are pulling back. The trend suggests a shift in consumer behavior as higher travel costs and slower wage growth influence leisure choices.