Services are immune to the normal logic of economics, the story goes. They continue to grow no matter what happens, and have an insatiable appetite for labor. Worst of all, services prices continually increase in good times and bad, creating an unstoppable wellspring of inflation. Of such things are policymakers' nightmares made.
The issue of inflation dogs economic policy. Pro-growth policies generate inflation and that damages the economy in the long run, but anit-inflation policies are anti-growth. Thus, policymakers face an unforgiving Catch-22, recently made worse, some say, by a new "menace," an inexorable economic juggernaut called services.