If we were optimistic, we would view the financial results for the United States Postal Service for October 2016 as a sign of better times. The first month of the new fiscal year looked pretty good. A successful business needs to have revenues growing faster than expenses. While not quite there yet, the Postal Service showed signs of progress. Here are some highlights:

• Total operating revenue came in at $6.211 billion, only slightly less than October 2015 when it was $6.255 billion. But the 0.7 percent reduction in revenue should be viewed in light of the removal of the 4.3 percent pricing surcharge from a year ago. Revenue did not drop anywhere nearly as much as price did. And October 2016 had one fewer week day that the prior October.
• Two reasons for solid revenue are volume increases in Standard Mail of 546 million pieces or 6.8 percent, and in Shipping of 37 million or 9 percent.
• Total mail and shipping volume was up 154 million pieces this October versus last, or 1.1 percent.
• Kudos to the USPS for realizing big volumes in election mail; we also believe that removal of the 4.3 percent postage surcharge increased the ROI on many Standard Mail programs and therefore volumes.
• Total controllable operating expenses were $5.811 billion, an increase of 1.1 percent over $5.749 billion last year.
• Controllable operating income was $400 million versus $506 million last October, which, again, had a 4.3 percent price surcharge.
• Two parts of uncontrollable operating expenses had interesting changes. The infamous amortization of retiree health benefits was cut in half from last year, at $245 million versus $484 million. That’s because the existing postal law of 2006 re-amortizes the expense from an unreasonable 10-year schedule to a more normal 40-year payoff. A 50 percent cost reduction is nothing to sneeze at. It will be a gift that keeps on giving.
• And workers’ compensation expense was adjusted downward by almost half a billion dollars or $490 million, mainly as the result of higher interest rates. Many experts expect interest rates to continue to rise from record lows as the Federal Reserve raises its rates and the new administration begins huge infrastructure spending programs that will increase borrowing.
• As a result of these two non-cash adjustments, the reported net income for October was actually higher than the controllable operating income, at $504 million.
• USPS ended October with $8.2 billion in cash in the Postal Service Fund, a very healthy amount of liquidity.

The Commerce Department reported on Tuesday that our economy grew at an annual rate of 3.2 percent in the third quarter ending September 30. The fastest growth rate in over two years should help mail volume growth that correlates closely with the economy. The Postal Service started Fiscal Year 2017 on a positive note and hopefully the trend will continue. Controllable operating expenses will be the key to the net results.