Don’t look now but the pieces are in place for a margin squeeze that equity bears have warned will snuff out the bull market, according to JPMorgan Chase & Co.

The evidence is in the National Federation of Independent Business survey, which showed companies across a broad swath of American industries are likely to boost wages this year faster than prices rise for finished goods. Such a mismatch is rare and has usually happened right before recessions in data going back to 1986.

A multitude of bear cases for stocks rest on margins, or the portion of sales that translate into earnings. It’s easy to see why: amid a dearth of revenue gains, American companies have reported year after year of earnings growth thanks to their ability to hold down costs such as pay. Margins, the fulcrum between top and bottom lines, reached records in 2014 and hovered near there ever since.

“When margins are beginning to possibly revert to their historic norms, there is fear that it leads to less earnings for companies and shareholders aren’t going to keep paying up,” said Bill Barker, a money manager who helps oversee about $1.5 billion at Motley Fool Funds in Alexandria, Virginia. “Sales are not growing and you can only have earnings to the degree that profit margins allow.”

Margin Forecast

Based on the trends in the labor market and gross domestic product, JPMorgan strategists led by Mislav Matejka predict margins may contract 2 percentage points this year. Such a narrowing would be particularly ill-timed with bulls pinning hopes on improving profitability to help reverse a decline in Standard & Poor’s 500 Index earnings.

Among S&P 500 firms, profit margins have more than doubled since 2009, reaching a record of 9.37 percent in the third quarter of 2014, data compiled by S&P Dow Jones Indices show. While the measure of profitability has since slipped, analysts surveyed by Bloomberg view the decline as temporary, projecting wider margins this year will spur a rebound after profit suffered in 2015 amid plunging oil and surging dollar.

JPMorgan’s study suggests the optimism is misplaced. Viewing the hiring survey as a rough indication of what will materialize in public companies in terms of sales and expenses, the outlook for profitability dims.

NFIB Survey

For the first time since the 2008-2009 global recession, the net percentage of firms with plans to raise wages in the next three months outnumbered those with plans to boost prices, according to NFIB’s survey of small businesses. The spread reversed a six-year trend of higher price expectations, falling below zero from September to November. It stayed at zero last month, the latest survey released on Jan. 12 showed.