A Look Inside the Consumer Price Index and Postal Rate Increases

Annualized Percentage Change in CPI-U and Available Price Cap

OK — so you know that price increases from the United States Postal Service (USPS) are linked to increases in the Consumer Price Index (CPI), right?  But did you know that there are controls on this? In fact, rises in prices for market-dominant postal products are subject to a statutory, CPI-based price cap. According to an explanation posted on the Postal Regulatory Commission (PRC) website, the PRC determines the price cap for any 12-month period by calculating the ratio of two 12-month CPI-U averages that are 12 months apart, subtracting one, and expressing the value as a percentage.

The PRC posted the most recent update of the tools they use to calculate the price cap on December 16, 2011. A table showing the 12-Month Average Change in CPI-U, and a bar graph and explanation showing the Annualized Percentage Change in CPI-U and Available Price Cap are available for public viewing here.

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