Wage Gains Threaten to Squeeze Retail, Industrial Profits

Higher labor costs pose risk to some U.S. companies already facing trade-related tensions, limited pricing power

China has pledged to retaliate against U.S. tariffs in “equal scale and equal strength.” In addition to tariffs, here are three ways Beijing could hit back at Washington. Photo: Getty Images

Danielle Chemtob

July 9, 2018 7:00 a.m. ET

Rising wages are beginning to eat into the profits of some U.S. companies.

Firms from dollar stores to hotel operators to fast-food chains have warned in recent months that higher labor costs have been a drag on their profits—a potential headwind for the nine-year stock-market rally as it struggles for momentum ahead of the second-quarter earnings season.

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