The United States Postal Service reported a $2.5 billion net loss for the fiscal third quarter ended June 30, 2026, down from a $3.1 billion loss in the same quarter last year, marking a $562 million improvement that masks deeper structural challenges facing the agency.
Operating revenue climbed to $19.9 billion, a 6.1 percent increase of $1.1 billion compared to the same quarter in 2025, driven by continued growth in Shipping and Packages and strength in Marketing Mail. Postmaster General David Steiner attributed the quarter’s progress to revenue generation and cost control, noting in the announcement that “our results this quarter reflect some progress relative to those areas of the business where we can exercise control.”
However, the agency continues to face what Steiner called “a severe liquidity crisis” rooted in its congressionally mandated business model. The improvement in net loss was bolstered by a $416 million decrease in workers’ compensation expenses, yet this was offset by increases in retirement benefits of $324 million and retiree health benefits of $195 million, according to the official USPS announcement. First-Class Mail, historically the agency’s most profitable service, saw revenue increase 4.3 percent to $6.1 billion, but volume declined 3.5 percent—a sign that price increases alone cannot stem the broader trend of mail volume collapse.
In May, USPS suspended employer contributions to the Federal Employees Retirement System pension program, a temporary measure that will conserve $2.5 billion through September 30. The agency deferred approximately $1.4 billion in pension obligations this quarter alone. Steiner warned that these actions are “only temporary measures” and that “pension obligations will have to be eventually satisfied,” making them unsuitable as long-term solutions.
Congressional Action and Structural Reform
USPS continues to push Congress for legislative and administrative reforms to address its financial trajectory. The agency has accumulated net losses exceeding $120 billion since 2007, as first-class mail volume has plummeted with the shift to digital communication. Steiner told Reuters that without Congressional action this year, USPS plans would “certainly have to entail changes that will impact service like taking a look at our service levels and closing thousands of unprofitable post offices, as well as raising prices.”
The Postmaster General has requested that Congress increase the statutory debt limit from $15 billion, unchanged since 1992, and modify pension funding rules that place a disproportionate burden on USPS. He also cited legislation pending in the Senate to add dozens of new ZIP codes, which he said could cost the agency $800 million. Additionally, USPS raised the price of a first-class mail stamp to 82 cents from 78 cents effective July 12, 2026, and is seeking approval for another stamp price hike in January 2027 rather than waiting until July 2027.
About 58 percent of USPS’s 18,000 post offices lose money, and roughly 70 percent of delivery routes operate at a loss, according to Steiner’s public statements. One key question, he noted, is whether USPS should continue delivering to 170 million addresses six days a week—a service that costs $3.4 billion annually. The Postmaster General has warned Congress of the need for post office closures without legislative intervention, and the USPS Board of Governors is scheduled to meet to review finances amid mounting pressure to stabilize the agency’s long-term viability.
Sources
- USPS Official Newsroom — Q3 FY2026 financial results, revenue by service category, pension suspension details, and Postmaster General Steiner’s statement
- Reuters — Q3 loss figure, year-over-year comparison, Steiner’s warnings on service cuts and post office closures, stamp price hike timeline, and cumulative losses since 2007
