A new report from the Bank of America Institute finds that American consumers are spending more on their hobbies but are facing higher prices for their enjoyment.
The report notes that Bank of America card data suggests consumers are facing “funflation” in the prices they pay for their hobbies at arts and crafts stores, hobby shops, outdoor recreation service providers and retailers that specialize in activities including hiking, camping, skiing and scuba diving.
Using that definition, card data shows spending on hobbies rose 7.9% year over year in August, which was twice as fast as the 3.4% growth in transactions. That trend is the opposite of what was observed in August 2025, when transactions outpaced spending by nearly a percentage point. Spending growth on hobbies outpaced transactions during the pandemic, per the report.
“In our view, it’s likely that people splurged on hobbies amid social distancing during the pandemic, then gravitated back toward pricier alternatives like travel throughout 2022 and 2023. However, last year there may have been some rotation back to less expensive leisure like hobbies as after-tax wage growth slowed considerably,” the Bank of America Institute wrote.
BANKS WARN AI SHOPPING AGENTS COULD INCREASE RISK OF SCAMS, FRAUD AND DATA PRIVACY BREACHES
Bank of America’s card data also suggests there’s been an acceleration in hobby spending in recent months, which the report said may be occurring as “some consumers balance shift away from travel due to higher prices from rising fuel costs.”
The report noted a generational divide in spending on hobbies, with older millennials spending the most, followed closely by baby boomers and Gen X. Those cohorts are spending significantly more on hobbies than their Gen Z counterparts, while younger millennials’ spending is roughly in the middle of their older and younger peers.
“Older Millennials also boast the largest share of their population with hobby spending. In our view, it’s likely because this group is most likely to have young children. Which may mean older Millennials not only spend on their own hobbies but on their kids’ as well,” the Bank of America Institute said.
AMERICANS SPLURGED SMARTER THIS SUMMER WITH MICRO-VACATIONS AND TRAVEL STACKING
It noted that data from the Census Bureau’s American Time Use Survey suggests that older millennials have the least amount of leisure time per day on average at a little more than four hours per day, which suggests that their hobby spending may be for their kids and themselves.
“On the other hand, younger Millennials and Gen Z have the lowest average spending, but a higher share of their population with hobby outlays. To us, this suggests that these generations are likely gravitating most of their spending toward less expensive hobbies like arts, crafts and board games,” the Bank of America Institute noted.
TOYS R US MAKES MAJOR COMEBACK WITH 120 NEW STORES OPENING ACROSS US THIS HOLIDAY SEASON
The report found that younger and older millennials, as well as Gen X, appear to be ramping up hobby spending while baby boomers and Gen Z are slowing theirs. Gen Z’s hobby spending showed near zero transaction growth in August compared with nearly 16% year over year the prior year, according to Bank of America’s card data.
The slowdown was “driven by a significant decrease in spending on outdoor recreation, offsetting increases in arts and crafts retailers and hobby shops,” with the report noting that last year’s spending may have been driven by purchases like hiking boots that last longer.
“It’s also possible that this reflects a shift to more ‘granny core’ activities like knitting, sewing or baking (arts and crafts),” the report said.
The Bank of America Institute also noted that Gen Z is spending the most on gaming, including board games and tabletop role-playing games that may require less frequent purchases.
Gen Z also spends about 20% to 25% of their leisure time playing games or using a computer, according to the Census Bureau’s time use survey.
Read the full article here
