America’s best buffet is so far off the Strip, it’s not even in Las Vegas. Ranked No. 1 last year in USA Today’s readers’ choice awards, the country’s best buffet is the Shady Maple Smorgasbord, just over a two hours car ride from Manhattan and much closer to Philadelphia. In the heart of Pennsylvania Dutch Country, Shady Maple has been described as 110,000 square feet of classic gastronomic pleasure. Don’t be intimidated by a 200-foot-long buffet! As Food & Wine’s David Landsel asked: “How much desiccated cooked veg does one groaning board need? How many lightly seasoned cold salads or eggs pickled in bright red beet juice, can one consume in one sitting? Are they seriously serving baked ribs, without irony? Does the gravy go on everything or only most things?” Nearly 1.5 million hungry customers stop in for a meal each year and they all save room for dessert knowing the pies, cakes, puddings, and ice creams of every flavor are all to die for.
Most Feathers’ quads have a common denominator, made from scratch every day. Today’s four-course meal refutes that recipe, instead covering three distinct themes.
The appetizer’s got a kick and a kicker. First, the kicker. With a hat-tip to QI Pro Barry Habib, ADP snuck in a downward revision to the tune of -215,000 for the full year 2024. We appreciate his eagle eye catching this as the press release oddly didn’t mention a thing. As for the kick, it wasn’t the headline. No doubt, February’s ADP private payroll gain of 77,000 was nearly half the consensus estimate of 140,000. But the biggest surprise was a 28,000 decline in the recession-proof industries of education and health care, which broke a 43-month expansion from July 2021 to January 2025 (purple line). The pandemic aside, month-over-month contractions in education and health services have but eight precedents since ADP’s 2010 inception.
What does this typically uncorrelated metric say of February nonfarm payrolls (orange line)? Since you asked, in 2022 and 2023, the average monthly education and health gain for ADP and NFP was an identical 85,000. The same cannot be said of January 2024 to January 2025, when ADP consistently underperformed. Not one of those 13 months saw ADP education and health’s delta print north of that of the NFP.
For those in the skeptical camp, believing ADP’s downdraft is a one-off aberration, there is one piece of fundamental anecdata that argues against the rogue month theory. Bloomberg’s BCY page tallies large bankruptcy filings by major S&P 500 industry. One guess at the largest slice of the (shoo-fly) pie in 2025 to date? Health care. For comparison, consumer discretionary commanded the greatest share over the last year. Backing these observations is National Association of Credit Management’s (NACM) Service Bankruptcy series that’s occupied negative z-score territory since 2022’s second half (olive line).
Today’s main course packs plenty of flavors. According to service sector business surveys via S&P Global and the Institute for Supply Management (ISM), trends in prices are moving up, sideways and down. All the bases are covered! To be sure, ISM (green line) and S&P Global’s input figures (lilac line) measure prices paid for materials and services. ISM noted the broad-based nature of the input cost bulge encompassing 16 of 18 service industries; the sole industry reporting a decrease in prices paid was mining.
S&P Global’s report echoed, with a broad range of goods and services reporting preemptive price hikes in case tariffs are imposed in addition to rising labor costs. Despite this, S&P Global chief economist Chris Williamson was quick to add the continued weakness in backlogs signaled “further job losses to come. And furthermore, “Adding to the gloomier picture in February was a sharp rise in costs, which companies were often unable to pass on to customers due to weak demand. While this reduced pricing power is good news for inflation, it’s potentially bad news for profitability.” The upshot: prices charged barely rose (aquas line).
Canada presaged disinflationary concerns in coming months south of its border in its sister S&P Global service survey: New Export Orders fell to 38.7 in February, the second sub-40 reading in the last three months (blue line). The -5.2-point monthly drop was the deepest since the initial shock of the pandemic in March 2020.
Because S&P Global services exclude cyclical industries like wholesale and retail, it artificially emphasizes others like leisure and hospitality. To that end, the Conference Board’s Vacation Intended series (yellow line) closely tracks Canada’s service exports. In recent months, it’s drawn a similar path. Disinflationary impulses on both sides of the border foretell disinflation in train for supercore (red line). Because this Fed-conceived gauge nets out heavily weighted rents, it inflates discretionary travel.
If you’ve left room for dessert, sample a sundae of M&A topped with service sector productivity. Best served cold, the merger & acquisition has hit the ice in 2025: the dollar amount of completed U.S. M&A deals plumbed to $20 billion in February (light blue line). We can’t draw a parallel to its closest precedent as April 2020 attended a manmade economic shutdown. This time, stunted animal spirits have induced a crimping in the ISM services Business Activity-Employment spread, which collapsed to 0.5 in February, a fraction of its 5.7 long-run average (fuchsia line). Stunted productivity and AWOL M&A are the makings of anything but a sweet ending for the labor-intensive service sector.