Smaller Postal Hikes?

Please see the Nov. 20 follow-up that corrected an inaccuracy in this post and provided further insight.

Now that the rate of inflation has turned negative, postal rates seem likely to increase only 3%, and perhaps less, next year.

The Consumer Price Index decreased 1.0% in October, continuing a recent pattern of price deflation, the Department of Labor announced today. Even if prices remain flat in November and December, the index would be up only 3.1% for the year.

The U.S. Postal Service is scheduled to announce new prices in February for most classes of mail, such as Periodicals, Standard, and First Class. By law, each class's average price increase, which will take effect in May, is largely limited to the change in CPI from December 2007 to December 2008. As Dead Tree Edition has previously reported, Periodicals may get an additional increase if it is determined that the Postal Service is losing money on the class.

Just three weeks ago, the chairman of the Postal Regulatory Commission was quoted as predicting the increases would be about 5%.