Consumer spending amounts to about two thirds of this economy, which makes consumer sentiment a very important indicator. On Tuesday, The Conference Board released its monthly gauge of consumer confidence, and the news was good: Consumer confidence ticked up overall in July — only the second month that’s happened this year.

Consumers are feeling better than earlier this year, but they’re not feeling great, said Stephanie Guichard, senior economist of global indicators at The Conference Board. For the sixth straight month, consumer expectations came in at a level that typically signals a recession ahead.

“We are still there. So there is still pointing to recession risks,” Guichard said.

Consumers are still being cautious with discretionary spending, she said. “We see some decline especially in categories like dining out, traveling.”

But consumers may be coming to terms with our new tariff normal, said Kayla Bruun, lead economist at Morning Consult.

“There was a lot of, kind of, I mean, I don't know about ‘panic,’ maybe that's overstating it, but something like panic about tariffs in April,” she said.

And even though tariffs are causing some retailers to raise prices?

“So much of those initially announced tariffs were either pared back or at least put on hold at least for a few more days,” said Bruun. “So that's avoiding that sort of worst case scenario that consumers were kind of alarmed about.”

But Bruun said one factor seems to be more and more of a drag on confidence: “There has been this cooling in the labor market. It just keeps incrementally getting a little bit worse,” she said.

There haven’t been many mass layoffs, said Bill Adams, senior vice president and chief economist at Comerica Bank. But?

“Consumers are seeing the least opportunities to find better jobs or new jobs since the post-pandemic economy unfolded,” he said.

The number of new hires and job openings declined last month, according to the Labor Department. Adams said that’s a concern for college grads just entering the job market.

“So it's a hard economy to find a new job if you don't have a job,” he said.

Overall, consumer views of job availability weakened for the seventh straight month.