Unless inflation suddenly rears its head in the next few months, any increases in U.S. postal rates next year would have to be by emergency request rather than being based on inflation.
Inflation would have to rise at an annualized rate of 5% during the final five months of the year for the Postal Service to have even the tiniest of price caps for rate increases in May. The inflation rate would have to spike to 15% for the rest of this year for the price cap to rise by just 1%.
The Department of Labor announced Friday that the Consumer Price Index decreased 0.2% (1.9% on an annualized basis) in July. The Postal Service’s authority to implement normal annual rate increases for most mail – including First Class, Standard, and Periodicals – next May is limited to average changes in the monthly CPI this year versus the same month in 2008. The July CPI was down more than 2% from July 2008, when energy prices peaked.
These, of course, are not normal times for the Postal Service, which is losing billions of dollars and is even talking about running out of money this year. That’s why, as Dead Tree Edition revealed last month, postal officials are considering relatively small “exigency-based” (emergency) rate increases next year in place of the usual inflation-based increases.
Two weeks after that article was published, Postmaster General Jack Potter acknowledged at a news conference that "a modest adjustment in prices" was possible in the spring.
Using deflation to keep postal rates in check? Well . . . that was the plan and the vision underlying PAEA. Apparently, though, that is not to be. Once again business mail users will get stiffed because people who are in charge of running, overseeing, regulating (or whatever) the Postal Service aren't willing to do what they need to do to keep a postal infrastructure functioning as it should.
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