WASHINGTON — The Postal Service reported a loss of $3.8 billion last year, despite a reduction of 40,000 full-time positions and other cost-cutting measures.

The loss was $1 billion more than the year before despite job cuts and other efforts designed to save billions of dollars, postal officials said Monday.

"Our 2009 fiscal year proved to be one of the most challenging in the history of the Postal Service," Chief Financial Officer Joseph Corbett said.

"The deep economic recession, and to a lesser extent the ongoing migration of mail to electronic alternatives, significantly affected all mail products, creating a large imbalance between revenues and costs," he said.

The post office has been struggling to cope with a decline in mail volume caused by the shift to the Internet as well as the recession that resulted in a drop in advertising and other mail. Total mail volume was 177.1 billion pieces, compared to 202.7 billion pieces in 2008, a decline of almost 13 percent.

For the fiscal year that ended Sept. 30 the agency had income of $68.1 billion, $6.8 billion less than in 2008. Expenditures were down $5.9 billion to $71.8 billion.

Postmaster General John Potter is seeking permission from Congress to reduce mail delivery from six days a week to five, a move that could save the agency $3.5 billion annually.

Potter has said the post office does not plan to raise rates next year on the items most commonly used by the public such as first-class mail.

"We realize our customers are facing the same economic challenges," said Potter.

In addition the agency is consolidating mail facilities, looking to close some offices and looking for new sources of income.

ATLANTA — Home Depot Inc.'s third-quarter earnings fell 8.9 percent as the housing and renovation markets remained weak, the nation's largest home improvement retailer said today.The company also raised its full-year earnings outlook as the quarter's earnings topped expectations. CEO Frank Blake said the company has seen signs of stabilization in real estate and has added market share in the quarter.Home Depot and other home-improvement retailers have faced sales declines as consumers hold back on do-it-yourself projects amid worry over jobs and home values. Although the U.S. housing market is stabilizing, after a nearly three-year decline, home prices remain far below their peak.On Monday, Home Depot's smaller rival Lowe's Cos. reported third-quarter profit fell 30 percent as sales declined 3 percent. Lowe's also observed that some of the hardest-hit home markets are stabilizing and said it expects this year's fourth quarter to be stronger than last year's.