The June NFIB Small Business Optimism Index releases at 6:00 ET Tuesday July 14, the only Tier-1 US data print on the calendar between Monday’s NY Fed Survey of Consumer Expectations and Wednesday’s 8:30 ET June CPI. The May headline printed at 94.4, three tenths above April’s 94.1 and the twenty-first consecutive month below the 52-year average of 98.0. The compensation-plans subindex eased from 18 to 17 in May, the cut-friendly side of the 16-to-20 band. Cost of inputs held the lead over quality of labor at 24 to 21 as the single most important problem cited by owners. The 10-year Treasury note reopens at 1:00 ET. Fed-funds futures priced the September 17 cut at 97 percent and the December 10 second cut at 55 percent into Monday’s close.
Comp plans, the wage line inside the pre-CPI window
The compensation-plans subindex measures the net percentage of small-business owners planning to raise worker compensation in the next three months. It leads the Employment Cost Index by roughly two quarters and is the only fresh small-business wage read that lands between the June average hourly earnings at 0.2 percent and the Q2 ECI final on August 27. A June print at 16 or below extends the four-month easing pattern that started in March at 19 and confirms the wage-cooling case Friday’s June NFP opened. A print at 19 or above breaks the pattern for the first time since February and pulls the December second cut probability back from 55 percent toward the 40 percent range the curve sat at before the July 3 payrolls-revisions print.
Actual compensation changes, the paired backward-looking subindex, ran at 32 percent in May, one point below the twelve-month average of 33 percent and the lowest reading since the January print. The two subindexes read together: plans falling while actuals hold roughly flat is the pattern the desk maps to a six-month lag into the ECI print. Plans and actuals falling together compresses that lag to three to four months.
Cost of inputs versus quality of labor, the tariff line
April was the first month since mid-2022 in which cost of inputs replaced quality of labor as the single most important problem cited by NFIB respondents, at 24 versus 22. May held that ordering at 24 to 21, a second consecutive month with inputs on top. A June print with inputs at 25 or above and labor at 20 or below is the cleanest small-business confirmation that the tariff pass-through is still in its acceleration phase, which lines up with ISM Manufacturing prices-paid at 65.7 in April, 64.2 in May, and the June print at 63.1 on July 1. A crossover back to labor on top would be the first meaningful signal that the tariff wave has crested at the small-business tier.
The prices-received subindex, the forward-looking pricing-power line, ran at 21 percent net raising prices in May. A June print at 23 or above feeds directly into the CPI core goods ex used vehicles line on Wednesday, which was the anchor of the May 0.24 percent core print and is the single line the Fed reads for the goods-side tariff passthrough into consumer prices.
The 10-year reopen at 1:00 ET, the market side of the setup
The 10-year Treasury note reopens at 1:00 ET Tuesday with $39 billion on the block, per the Treasury’s July 3 auction announcement. The when-issued yield closed Monday at 4.11 percent. Monday’s 3-year note auction cleared with a 0.6 basis point stop-through at 3.61 percent and indirect bidders at 68.2 percent, a firm sponsorship read. A Tuesday 10-year print that stops through the when-issued by one basis point or more with indirects at 66 percent or higher is the cleanest signal that the curve is comfortable owning duration into the CPI print. A tail of two basis points or more with indirects at 63 percent or lower is the first meaningful pullback in duration bid since the May 8 reopening, and it pulls the intraday September cut probability back one to two points on the tape.
The 10-year sits inside the pre-CPI window for the first time on this refunding cycle. The pattern the desk reads from the June 10 sequence was a 0.8 basis point tail on the 3-year and a clean 10-year reopen the following morning, with the September pricing moving four points between the two auctions. The July setup mirrors the sequencing.
What Tuesday sets up for Wednesday CPI
The Fed-funds September 17 cut at 97 percent and the December 10 second cut at 55 percent carry a residual 20 basis points overpricing on the September cut, which reads as roughly 80 percent September at 25 basis points and 17 percent September at 50 basis points. The NFIB comp-plans line at 16 or below and the 10-year reopen stopping through the when-issued together move the size question toward a two- to three-point lift in the 50-basis-point tail probability. A comp-plans print at 19 or above with a 10-year tail collapses the 50-basis-point tail toward zero without touching the September timing.
The four lines the CPI print gets read against Wednesday hold from the June cycle: supercore at 0.25 percent or below, owners’ equivalent rent at 0.30 percent or below, core goods ex used vehicles between 0.20 and 0.30 percent, and medical services flat or cooler with the PPI on Thursday confirming. May core CPI printed at 0.24 percent and cleared the first half of the two-print condition Williams laid out at the June 26 BIS conference. The June print clears or fails the second half.
The headline consensus for June sits at 3.6 percent year-over-year against May’s 3.7 percent. The core consensus sits at 0.22 percent month-over-month against May’s 0.24 percent. The wires will lead with those two numbers Wednesday morning. NFIB Tuesday and the 10-year reopen decide what the Committee carries into the July 30 decision alongside them.