The U.S. Postal Service has plans to increase its prices for postage, but not until after Christmas.
These changes will be put in place to increase revenue for the U.S. Postal service by $2 million. Effective in January of 2014 the prices are as follows:
· 1 oz. Letters: rises 3 cents to 49 cents
· Letters greater than 1 oz.: increases 1 cent to 21 cents
· Letters with international destinations: $1.15
· Postcards: increases 1 cent to 34 cents
Typically the Post Office keeps up its prices with the Consumer Price Index’s rate of inflation. This year inflation has risen to 4.2%. According to Governors of the Postal Service, these new prices are higher than the inflation rate. Even though U.S.P.S. mostly caps prices with the CP index, this elevation was deemed necessary to keep the Postal Service still operating.
Every year the Postal Service faces serious financial challenges because revenue does not keep up with operation costs. Last fiscal year alone a total $15.9 billion debt was accrued. This year it is expected that an additional $6 billion will be added to the debt, surpassing the $20 billion checkpoint. The Post Office no longer receives any government subsidies.
These price proposals will be reviewed further at the legislative level, but should they become effective, those increases will start on January 26, 2014.