U.S. Postal Service to raise prices in January

By Elvina Nawaguna WASHINGTON (Reuters) - The cash-strapped U.S. Postal Service plans to raise the cost of mailing a letter in the United States by three pennies to 49 cents in January, the agency announced on Wednesday. The plan to increase the price of stamps and postal services is expected to raise $2 billion annually and is subject to approval from the Postal Regulatory Commission, it said. The mail-carrier lost nearly $16 billion last year and expects to lose $6 billion this year. The Postal Service Board of Governors voted on the price increases at a meeting on Wednesday, citing a dire financial situation. Legally, the Postal Service can increase its prices annually only up to the rate of inflation as measured by the Consumer Price Index, except in adverse circumstances. Industry groups and unions say raising prices beyond the annual limit could hurt the mailing industry and their businesses. The Postal Service is struggling under the pressure of massive payments into a mandatory fund for its future retirees' healthcare, while mail volumes tumble because more Americans prefer to communicate electronically and pay bills online. (Editing by Karey Van Hall and Mohammad Zargham)