Overstock was recently up 2.6 percent.

— Stephen Grocer

Are the stars aligning for wage growth?

One of the great mysteries of the recovery is why wage growth has remained lackluster as the labor market has tightened. Average hourly earnings rose just 2.5 percent last year, below the Fed’s target and in line with recent years.

But there has been some optimism that wage growth might pick up this year because: 1) The unemployment rate should continue to fall; 2) Companies are doling out one-time bonuses and pay raises in response to the new tax law; 3) Several cities and states raised the minimum wage on Jan. 1.

The economists at BofA Merrill Lynch took a closer look these dynamics, and here’s their take away:

“Wage increases by companies and higher state and local minimum wages should provide a slight bump to wage growth in the next few months...Once the initial boost to wage growth fades, we think the trajectory for wage growth should be a function of the degree of tightening in the labor market. The descent in the unemployment rate should be able to boost wages to a high-2% pace by year-end and to 3% by the middle of 2019. The trajectory is still gradual, but clearly higher.”

Do investors care about a government shutdown?

So far, the markets don’t seem bothered. S. & P. 500 futures were up this morning.

Will that change as the Senate looks deadlocked over the House’s stopgap funding bill? Democrats so far appear united on wanting a permanent shield for the young immigrants known as Dreamers (something C.E.O.s like Tim Cook and Steve Schwarzman support), and Senate Republicans need 60 votes to pass the funding bill.

What’s in the House measure: Money to keep the government open for a month, six years’ funding for the Children’s Health Insurance Program, and the delay or suspension of several taxes tied to the Affordable Care Act.

Democrats’ reaction: House Minority Leader Nancy Pelosi said, “This is like giving you a bowl of doggy doo, put a cherry on top and call it a chocolate sundae.”

Why businesses should care: If Democrats force a shutdown and win the escalating political battle, they could have more clout to push back against President Trump’s agenda, including further deregulation of industries. If Republicans win, they could add to legislative momentum from their tax overhaul victory.