No Core Inflation for the Post Office

Yesterday the U.S. Postal Service announced the cost of a first class stamp will increase by a penny to 42 cents on May 12, 2008. Other postage fees will also increase at that time.

The Post Office is permitted to raise rates with 45 days notice. Increases must be within the rate of inflation for the previous 12 months. The Postal Regulatory Commission calculated the inflation rate at 2.9% through January.

Unlike the Federal Reserve, the Post Office doesn’t exclude food and energy costs (core inflation). The Post Office is smart enough to realize that they cannot deliver the mail without food and fuel.

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