WASHINGTON The Postal Service said today it lost $8.5 billion last year despite deep cuts of more than 100,000 jobs and other reductions in recent years.

The post office had estimated it would lose $6 billion to $7 billion, but a sharp decline in mail took a toll. Increased use of the Internet and the recession, which cut advertising and other business mail, meant less money for the agency.

For the year ending Sept. 30, the post office had income of $67.1 billion, down $1 billion from the previous fiscal year. Expenses totaled $70 billion, a decline of about $400 million. The post office also was required to make a $5.5 billion payment for future retiree health benefits.

The loss of $8.5 billion in 2010 was $4.7 billion more than the previous year.