The economy looks solid on paper with slowing inflation and low unemployment, but consumer confidence just hit a new low for the year. The main issue is purchasing power. ADP released data showing that 37% of workers were worse off in real terms by the end of 2024, even after factoring in job changes. Over 40% of people who stayed at the same job from 2021 to 2024 saw their real wages drop. At Jackson Hole, Fed Chair Kevin Warsh noted that S&P 500 profits are up over 20% in the last year. But he also pointed out that PCE inflation is still running at 3.7%, above their 2% target. The Fed is staying cautious because lower-income earners get hit the hardest if inflation stays high.