KeNo's Housing and Economic Portal: Wednesday July 21 Housing and Economic stories

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San Carlos council votes to disband police force‎ - (www.sfgate.com) The city of San Carlos has voted to dissolve its police force and to begin the steps to outsource the job of law enforcement to the San Mateo County sheriff's office as a cost-cutting measure. The City Council voted 4-1 on Monday night to disband its 85-year-old Police Department to help save nearly two-thirds of next year's $3.5 million deficit. The council directed city staff to begin negotiating with the sheriff's office, said Mayor Randy Royce, who voted to scrap the city's 32-member force. Royce noted that the sheriff's office, which has 462 deputies, has agreed to offer full-time jobs to all San Carlos officers. Redwood City police, which had also offered to take over police services, could not make such a guarantee. "We do have a lot of local cops, and those local cops will continue to work," Royce said Tuesday. "If you look at any organization, it's good to have some change. We'll have the best of both worlds. Having the mix of existing local cops and new officers, they'll be able to provide as good, if not better, level of service." City Councilman Matt Grocott cast the lone dissenting vote, saying he supported the idea of a joint powers authority under which the city would maintain its police force but partner with another agency. Grocott, the San Carlos Police Officers Association and Ken Castle, who leads San Carlos' largest neighborhood watch group, were among those who criticized outsourcing on the grounds that it would cost the city control over its affairs.

1.3 Million Unemployed Won't Get Benefits Restored - (www.cnbc.com) More than 1.3 million laid-off workers won't get their unemployment benefits reinstated before Congress goes on a weeklong vacation for Independence Day. An additional 200,000 people who have been without a job for at least six months stand to lose their benefits each week, unless Congress acts. For the third time in as many weeks, Republicans in the Senate successfully filibustered a bill Wednesday night to continue providing unemployment checks to people who been laid off for long stretches. The House is slated to vote on a similar measure Thursday, though the Senate's action renders the vote a futile gesture as Congress prepares to depart Washington for its holiday recess. A little more than 1.3 million people have already lost benefits since the last extension ran out at the end of May. "It is beyond disappointing that Republicans continue to stand almost lockstep against assistance for out-of-work Americans," said Senate Majority Leader Harry Reid, D-Nev.

Fed officials see high unemployment for years - (www.reuters.com) Unemployment is likely to stay high for a long time, two Federal Reserve officials said on Wednesday, suggesting the U.S. central bank is in no rush to raise its ultra-low interest-rate policy. The dovish comments, from Chicago Federal Reserve President Charles Evans and Federal Reserve Governor Elizabeth Duke, came two days before a government report expected to show that U.S. non-farm payrolls fell in June. If that occurs, June will mark the first decline in monthly non-farm payrolls this year. The Chicago Fed's Evans said the economic recovery is "definitely on," with growth expected at 3.5 percent this year. But inflation is dropping, and he expects it to run below his guideline of 2 percent for the next three years or more. Meanwhile, unemployment is at 9.7 percent, "and it's going to be a number of years before it's going to get down to any type of rate that we might almost say is acceptable," he said in a rare 30-minute live interview on CNBC.

Fed Officials Avoid Talk of Further Stimulus to Stoke Growth - (www.bloomberg.com) Federal Reserve policy makers expressed caution about the outlook for the U.S. recovery and bank lending without backing any new steps by the central bank to stimulate growth. Atlanta Fed President Dennis Lockhart said yesterday that while the recovery isn’t sustainable enough yet to warrant raising interest rates, he doesn’t see a need for additional asset purchases to aid the economy. Fed Governor Elizabeth Duke said it may take years to return to pre-recession credit levels and that there’s “no single step” to unclog lending markets. U.S. central bankers are sticking to their 18-month policy of leaving the benchmark interest rate near zero with the European debt crisis sapping investor confidence and U.S. stocks plunging to their lowest close since October. Last week Fed officials renewed a pledge to keep the rate at a record low for an “extended period.” “The underlying conditions are probably less robust than was generally expected,” said Keith Hembre, Minneapolis-based chief economist at U.S. Bancorp’s FAF Advisors Inc., which oversees about $91 billion.

Majority of U.S. Workers Lost Jobs, Wages or Hours - (www.businessweek.com) More than half of U.S. workers were either unemployed or experienced reductions in hours or wages since the recession began in December 2007, according to a private report. The worst economic slump since the 1930s has affected 55 percent of adults in the labor force, the Washington-based Pew Research Center, a nonpartisan organization, said today. The survey found that 32 percent of employees where jobless at some point during the past 30 months. The pace of hiring suggests it will take years for the world’s largest economy to recover the more than 8 million jobs lost during the contraction. A slow rebound in employment stifles consumer spending, which accounts for about 70 percent of the economy. “A unique feature of the Great Recession is that, for the first time, the majority of the unemployed workers had lost their jobs for good,” Pew said in the report. “Households have adopted a more fiscally conservative path since the recession started.”