The Other Risk From Rising Wages

Investors are worried that a tight labor market will breed inflation. Maybe they should worry more about what it could do to stock prices.

After years of lukewarm wage growth, the labor market is showing a bit of heat. The January jobs report, which showed average hourly earnings up 2.9%, came as a surprise to investors, challenging their belief that the Federal Reserve would raise rates at a leisurely pace this year. That hope took another hit last week after a hawkish set of minutes from the Fed’s January meeting was released....