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Consumer confidence notched a surprise gain in July, but Americans are still wary about the state of the U.S. economy.

The consumer confidence index came in at 100.3 in July, ticking up from June’s Economists polled by FactSet had expected it to dip to 99.5.

“Confidence increased in July, but not enough to break free of the narrow range that has prevailed over the past two years,” said Dana Peterson, chief economist at The Conference Board. “Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future; things that may not improve until next year.”

The expectations index, which measures consumers’ short-term outlook for the economy, improved to 78.2 in July from 72.8 in June.

Consumers have slightly higher expectations for future income growth, Peterson said, even though they’ve gotten “a bit less positive” about current labor and business conditions.

Americans’ personal income in the second quarter increased by $237.6 billion, according to the preliminary gross domestic product report, up about 1% from the previous quarter, helping boost outlays. Consumer spending on goods rose about 2.5% in the second quarter, while services spending grew 2.2%.

That said, Americans plan to be more cautious about their spending over the next six months. Purchasing plans for homes fell to a 12-year low, Peterson said. Plans to spend on services were weaker as well, she added, with Americans saying they’re cutting back on travel and entertainment to prioritize non-discretionary expenses, such as healthcare and car repairs. And as the back-to-school season picks up, more consumers reported plans to buy a smartphone or laptop.

Consumer sentiment, another gauge measuring the way consumers feel about economic conditions, provided a less rosy picture. The index slightly more than economists were expecting in July, largely driven by a downturn in attitude from lower-income consumers.

Lower-income households benefit less from the recent run-up in stock prices and housing values that have buoyed upper-income spending and sentiment, said Oren Klachkin, financial market economist at Nationwide Economics, following Friday’s sentiment data.

They’ve also felt the impacts of inflation more acutely, which has translated to reduced spending. Indeed, retailers that cater to lower-income demographics, such as Five Below and Dollar Tree, have flagged that their customers are spending less on discretionary goods.