After five straight semiannual price hikes, the U.S. Postal Service is finally holding stamp prices steady this January.
For more than 15 years, the USPS has been losing money even though it’s supposed to sustain itself financially without taxpayer funds. To offset inflation and limit the agency’s losses, officials have recently enacted a series of aggressive price hikes that have left Americans grumbling.
The most recent stamp price change, in July, lifted the cost of a “Forever” stamp to 73 cents. The price is now 33% higher than it was in 2021, when stamps cost 55 cents.
The Postal Service broke with tradition when it announced last fall that there would not be another price increase to kick off 2025. The agency said its prior adjustments had boosted revenue and expressed hope that cooling inflation would help stabilize costs.
“Our strategies are working, and projected inflation is declining,” Postmaster General Louis DeJoy said in a September news release. “Therefore, we will wait until at least July before proposing any increases for market dominant services.”
Despite DeJoy’s upbeat tone about improving conditions, the Postal Service lost $9.5 billion in fiscal year 2024 and said it expects to lose money again in 2025.
Stamp prices remain flat, shipping costs could rise
The size of the last stamp price change likely factored into the decision to hold off on increases in January amid criticism about the mounting cost of postage. The cost of a “Forever” stamp went up 5 cents in July, which tied a 2019 hike as the largest stamp price increase ever. (These stamps cover the postage to mail a 1-ounce letter within the U.S., regardless of any future price increases.)
But the break from price increases will likely be short-lived. In a September filing, the Postal Service said it expects to return to a twice-a-year cadence of price increases in 2026 and 2027.
While stamp prices are remaining flat for now, the Postal Service is pushing to increase shipping costs on Jan. 19.
If the Postal Regulatory Commission approves proposed changes, shipping prices will rise 3.2% for Priority Mail and Priority Mail Express services and 3.9% for USPS Ground Advantage services. High-volume shippers who use Parcel Select services would also see a 9.2% increase.
Why are shipping costs going up if stamp prices are not? In a November release, the Postal Service explained that stamp prices are mainly based on the consumer price index, a measure of inflation, while other shipping prices “are primarily adjusted according to market conditions.”
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According to a report from Money.com, the U.S. Postal Service has announced that stamp prices will remain steady in January, after five consecutive semiannual price hikes. However, the agency has also stated that it may increase shipping costs in the near future.
The Postal Service has been facing financial struggles for over 15 years, despite being expected to sustain itself without taxpayer funds. In an effort to offset inflation and limit losses, the agency has implemented several price increases, with the most recent one in July raising the cost of a “Forever” stamp to 73 cents. This is a 33% increase from 2021, when stamps were priced at 55 cents.
In a break from tradition, the Postal Service has announced that there will be no price increase in January 2025. The agency attributes this decision to the success of their previous price adjustments and hopes that decreasing inflation will help stabilize costs. However, despite this positive outlook, the Postal Service still reported a loss of $9.5 billion in fiscal year 2024 and expects to continue losing money in 2025.
While stamp prices will remain unchanged for now, the Postal Service is seeking to increase shipping costs on January 19th. If approved by the Postal Regulatory Commission, Priority Mail and Priority Mail Express services will see a 3.2% increase, while USPS Ground Advantage services will see a 3.9% increase. High-volume shippers who use Parcel Select services may also face a 9.2% increase.
The Postal Service has stated that stamp prices are primarily based on the consumer price index, which measures inflation, while shipping prices are adjusted according to market conditions. This explains why shipping costs may increase even though stamp prices are not. However, the agency has also mentioned that it plans to return to a twice-a-year cadence of price increases in 2026 and 2027.
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