Too Hot for the Fed to Stop

Investors have been hoping the Federal Reserve’s message following next week’s policy-setting meeting will be “hike in May and go away.” But recent economic data suggests the central bank won’t be able to do that.

The Labor Department on Friday reported that its employment cost index rose a seasonally adjusted 1.2% last quarter from the fourth quarter, stronger than the 1% economists polled by The Wall Street Journal expected. That put it 4.8% above its year-earlier level—not far below the 5.1% it clocked in the fourth quarter, and much higher than Fed policy makers think is consistent with their 2% inflation goal.