Hobby Spending Rises Amid 'Funflation' in 2026

Hobby spending in August 2026 saw a significant increase, outpacing overall transaction growth by more than double, according to a new report from the Bank of America Institute. This surge indicates that consumers are dedicating more funds to their leisure pursuits, even as the cost of these activities is escalating. The report highlights a "mini hobby renaissance" driven by online trends where Gen Z and millennials are embracing "grannycore" skills such as knitting, gardening, scrapbooking, and sewing. However, the Bank of America Institute has identified this trend as "funflation," a phenomenon where the prices of goods and services associated with hobbies, including those sold at arts and crafts stores, hobby shops, and outdoor recreation retailers, are rising disproportionately.

The data reveals a cyclical pattern in hobby engagement. Hobby spending experienced a major spike during the COVID-19 pandemic, around early 2021, before gradually declining in the subsequent years. As of August 2026, interest is showing renewed upward momentum. Specifically, hobby spending increased by 7.9% year over year, with the number of actual transactions growing by 3.4%. The Bank of America Institute suggests that this resurgence may be linked to a shift away from more expensive leisure alternatives like travel. This rotation back to hobbies could be influenced by a considerable slowdown in after-tax wage growth and increased fuel costs that have made travel less accessible.

Across different age demographics, elder millennials were the highest per-customer spenders on hobbies in August 2026. The Bank of America Institute attributes this to the higher likelihood of this generation having young children, which often correlates with increased spending on family-oriented activities and crafts. Boomers and Gen Xers followed closely behind elder millennials in their hobby expenditures. Gen Z, on the other hand, spent the least on hobbies. Researchers from the report theorize that this lower spending among Gen Z might be due to a strategic pivot from more costly hobbies to less expensive alternatives, or potentially a greater focus on digital or free leisure activities. The report's findings underscore the growing economic impact of the hobby sector and the emerging challenge of "funflation" for enthusiasts seeking affordable recreational outlets.