For the first time after five consecutive semiannual price hikes, the U.S. Postal Service (USPS) is maintaining stamp prices at their current levels this January, providing some relief to consumers.
For over 15 years, the USPS has been struggling financially, operating under the mandate to sustain itself without relying on taxpayer funding. As part of their strategy to combat rising inflation and mitigate financial deficits, officials have implemented a series of significant price increases that have led to widespread dissatisfaction among Americans.
The latest adjustment in stamp pricing occurred in July, when the cost of a “Forever” stamp rose to 73 cents. This represents a staggering 33% increase compared to 2021 when the price was only 55 cents, highlighting the dramatic escalation in postal costs.
In a notable deviation from its historical practices, the Postal Service declared last fall that there would be no price increase at the start of 2025. The agency indicated that its previous adjustments had successfully bolstered revenue and expressed optimism that cooling inflation trends would help stabilize future costs.
“Our strategies are proving effective, and projected inflation is on a downturn,” stated Postmaster General Louis DeJoy in a September news release. “As a result, we will hold off on any proposed increases for market-dominant services until at least July.”
Despite DeJoy’s positive statements regarding improving financial conditions, the Postal Service reported a staggering loss of $9.5 billion in the fiscal year 2024 and anticipates further financial losses in 2025.
Understanding the Current Stability in Stamp Prices and Future Shipping Cost Increases
The substantial nature of the last stamp price adjustment likely played a critical role in the decision to refrain from increasing prices this January, especially amid growing public criticism regarding the rising costs of postage. The recent 5-cent hike for a “Forever” stamp in July tied the record for the largest price increase since 2019, affecting the postage needed for a 1-ounce letter sent within the U.S., regardless of any future pricing changes.
However, this pause in price hikes may not last long. In a filing made in September, the USPS indicated that it expects to revert to a pattern of biannual price increases in the years 2026 and 2027, aligning with their historical pricing strategy.
While stamp prices remain stable for the moment, the Postal Service is actively seeking to increase shipping costs starting January 19. This proposed adjustment could significantly affect consumers and businesses alike.
If approved by the Postal Regulatory Commission, shipping rates are projected to increase by 3.2% for Priority Mail and Priority Mail Express services, and by 3.9% for USPS Ground Advantage services. Additionally, high-volume shippers utilizing Parcel Select services might see a substantial 9.2% increase, adding to the cost burden for frequent mailers.
So, why are shipping costs on the rise while stamp prices are remaining unchanged? In a November announcement, the Postal Service clarified that stamp pricing is primarily influenced by the consumer price index, a key measure of inflation, while adjustments to other shipping rates are predominantly based on market conditions and demand fluctuations.
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