US Economy Sees Shift to 'Funflation' as Consumers Spend More on Leisure

Funflation, a rising cost of leisure and entertainment, is gaining traction in the US economy. According to Bank of America card data, hobby spending jumped 7.9% year over year in August 2026, more than double the 3.4% growth in transaction volume.

This trend is not just limited to a few industries; it's a broad phenomenon that spans consumer discretionary heavyweights like Amazon and specialized entertainment companies. The beneficiaries of funflation include companies like Live Nation Entertainment, Spotify Technology, Expedia Group, and Airbnb, which have reported solid year-over-year sales growth in the second quarter of 2026.

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. This means consumers are paying more for leisure categories they value and absorbing those costs rather than cutting back. As a result, sales at sporting goods, hobby, musical instrument, and book stores rose 10.7% in the 12 months through August.