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'Historically strong' wage growth bad news for stocks?

Wages look to be on the rise, and unfortunately for some companies, that means their labor costs are rising, too.

On Wednesday, the National Federation of Independent Business reported that the net percentage of firms planning to raise worker compensation increased to 20 percent, which it called a "historically strong" number in the most recent economic recovery.

According to Deutsche Bank's Joseph LaVorgna, this data point generally leads the employment cost index (ECI) for private industry workers. As the percentage of firms planning to raise compensation goes up, that should indicate a "sharp acceleration in labor costs."

"A regression of the ECI on NFIB compensation plans tells us that the growth rate of the former should pick up dramatically over the next few quarters," LaVorgna wrote in a Wednesday note. "Clearly then, the NFIB is pointing to stronger wage pressure."

LaVorgna predicts year-over-year growth on the ECI of 3.2 percent this quarter and 3.5 percent in the first quarter of 2016. For the second quarter of 2016, ECI should reach 4 percent for the first time since 2002, he wrote.

Globally, real wages are expected to increase 2.5 percent in 2016, the biggest increase in three years, according to advisory firm Korn Ferry Hay Group. Within North America, wages are forecast to rise 2.8 percent after inflation.

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According to Max Wolff of Manhattan Venture Partners, such wage growth has been long overdue.

"Let's be honest and fair here, we need these wages to go up to rebuild household balance sheets and to allow the general public of the United States to continue to spend and grow their expansion," Wolff said Tuesday on CNBC's "Trading Nation." "We really haven't seen any real wage growth since 2008, so we're kind of catching up."

But on the corporate side, the increase in labor costs has already started to impact earnings for industries such as retail and fast food. Among those citing higher wage pressure in the most recent round of earnings reports are TJX Companies, Wal-Mart, Ross Stores, Kohl's, Chipotle and McDonald's. In a conference call, TJX executives said that they expect wages to weigh on earnings through 2018.

"If the wage component is a huge part of cost or if you have no way to offset that by benefiting from a little pricing power, which some companies will get, you'll be hit," Wolff said.

On a third-quarter earnings call, Kohl's chief financial officer Wesley McDonald said the increase in wages requires the company to look for other cost-cutting measures, such as increased efficiency in e-commerce and marketing.

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"The thing that's relatively new to us at Kohl's, and also in the industry, is obviously wage inflation primarily with our store associates. So that's something that's real and we've chosen to address it market by market," McDonald said. "That's going to be a headwind. It was a headwind in the current quarter, it will be a headwind in the fourth quarter. We just have to find savings in other areas to cover it."

As corporate profits suffer, Phillip Streible of RJO Futures said that could translate into trouble for stocks, as well.

"I think it takes a big hit, but it goes farther out ... and you see retail prices start to go down on the stocks side, and also specifically I think the fast food industry will be hit pretty hard as well," Streible said Tuesday on "Trading Nation."

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