Bank of America report says ‘funflation’ hits leisure spending

A new report from the Bank of America Institute finds that American consumers are spending more on leisure but face higher prices for pleasure.

The report notes that Bank of America card data suggests that consumers are experiencing “funflation” in the prices they pay for their hobbies at arts and crafts stores, hobby shops, outdoor recreation service providers and retailers specializing in activities such as hiking, camping, skiing and scuba diving.

Using this definition, the cards’ data shows that spending on leisure grew 7.9% year-over-year in August, twice as fast as the 3.4% growth in transactions. This trend is the opposite of that seen in August 2025, when transactions exceeded spending by almost a percentage point. Growth in leisure spending has outpaced transactions during the pandemic, according to the report.

“In our view, it is likely that people pursued hobbies amid social distancing during the pandemic and then turned to more expensive alternatives like travel throughout 2022 and 2023. However, last year there may have been some rotation toward less expensive hobbies like hobbies as after-tax wage growth slowed significantly,” the Bank of America Institute wrote.

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Consumers are spending more on leisure as “funflation” hits household budgets, the Bank of America Institute found. (Joe Raedle/Getty Images)

Card data from Bank of America also suggests there has been an acceleration in leisure spending in recent months, which the report said could be happening as “some consumers move away from travel due to rising prices from rising fuel costs.”

The report notes a generational divide in leisure spending, with older millennials spending the most, followed closely by baby boomers and Gen

“Older Millennials also represent the largest share of their population spending on hobbies. In our opinion, this is likely because this group is most likely to have young children. Which may mean that older Millennials are spending not only on their own hobbies but also on those of their children,” the Bank of America Institute said.

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Arts and crafts retailers have benefited as consumers shift away from more expensive leisure activities like travel. (Joe Raedle/Getty Images)

He noted that data from the Census Bureau’s American Time Use Survey suggests that older millennials have the least amount of free time per day on average, at just over four hours per day, suggesting that their leisure time may be for their children and themselves.

“On the other hand, younger Millennials and Generation Z have the lowest average spending, but a higher share of their population with leisure-related spending. To us, this suggests that these generations are likely directing most of their spending toward less expensive hobbies like arts, crafts, and board games,” noted the Bank of America Institute.

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Gen Z spends the most on games, especially board games and tabletop role-playing games. (John Greim/LightRocket via Getty Images)

The report finds that younger and older millennials, as well as Generation X, appear to be increasing their leisure spending, while baby boomers and Generation Z are slowing theirs. Gen Z’s leisure spending showed near-zero transaction growth in August, compared to nearly 16% year-over-year the year before, according to Bank of America cards data.

The slowdown is “driven by a significant decrease in spending on outdoor recreation, offsetting increases at arts and crafts retailers and hobby stores,” with the report noting that last year’s spending may have been driven by purchases like hiking boots that last longer.

“It is also possible that this reflects a transition to more ‘grandma’ activities such as knitting, sewing or baking (arts and crafts),” the report said.

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The Bank of America Institute also noted that Gen Z spends the most on games, including board games and tabletop role-playing games that may require less frequent purchases.

Gen Z also spends about 20 to 25 percent of their free time playing games or using a computer, according to the Census Bureau’s Time Use Survey.