U.S. jobless claims jumped to their highest level since October while food and energy costs boosted producer prices, pointing to lingering headwinds for an economic recovery that had been showing renewed vigor.
A surge in exports to their highest level in two years helped narrow the trade deficit, however, an encouraging sign.
Despite the more positive outlook for growth in recent weeks, the job market still appeared to be struggling.
The number of Americans filing for first-time unemployment benefits rose unexpectedly to 445,000 from 410,000 in the prior week, the Labor Department said on Thursday. It was the biggest one-week jump in about six months, confounding analyst forecasts for a small drop to 405,000.
U.S. stock index futures added to losses after the jobless claims data, while government debt prices rose.
The jobless number highlights the patchy recovery we've seen in the job market and reinforces that it will be a slow process bringing down the jobless rate, said Omer Esiner, market analyst at Commonwealth Foreign Exchange in Washington. The one bright spot was a further decline in the trade deficit, which should contribute positively to fourth-quarter growth.
A Labor Department official did note the rebound in benefit claims occurred following the holidays, which may have hindered new applications and created a backlog. Without the seasonal adjustment, claims were up by nearly 200,000 to 770,413.
As last year drew to a close, food and energy costs were rising relentlessly at the wholesale level despite a tame underlying inflation trend, complicating the outlook for monetary policy.
U.S. producer prices climbed 1.1 percent in December after a 0.8 percent rise in November, according to another Labor Department report. Economists had been looking for a repeat of that 0.8 percent advance in December.
Inflation excluding food and energy, however, rose just 0.2 percent, in line with forecasts. That left the year-on-year gain in core producer prices at 1.3 percent, just below analyst estimates.
Among the biggest gainers were home heating oil, which jumped 12.3 percent, and fresh and dry vegetables, which surged 22.8 percent. Fresh fruits and melons rose sharply for a second straight month, posting a 15.4 percent gain.
A recent spike in global food costs has raised fears of a crisis in the poorer corners of the developing world.
On a more positive note, the U.S. trade gap surprised analysts with a small decline to $38.3 billion from $38.4 billion in October, the Commerce Department reported. Analysts had expected it to widen to $40.5 billion.
November's deficit was the lowest since January 2010. Exports of goods and services totaled $159.6 billion, the highest since August 2008 -- just weeks before the bankruptcy of Lehman Brothers touched off a trade-crushing global panic.
November exports to China, at $9.5 billion, were the highest on record.
The split between weak underlying inflation and high food and energy prices makes it harder for Federal Reserve officials to argue publicly that inflation is not a threat. A fear of inflation being too low has underpinned the Fed's efforts to support the economy by purchasing government bonds.
Another key factor is the bleak jobs picture, reinforced by the Labor Department data.
Continuing claims did retreat sharply to 3.88 million from 4.13 million, offering some reason for hope. Still, the total number of Americans on benefit rolls, including extended benefits under emergency government programs, jumped to 9.19 million from 8.77 million.
The four-week moving average of new claims, which strips out short-term volatility in the data, rose by 5,500 to 416,500.
The U.S. economy has been expanding since the summer of 2009, but the pace of growth has not been sufficient to put a significant dent in the unemployment rate, which remains at an elevated 9.4 percent.
(Additional reporting by Emily Kaiser; Editing by Neil Stempleman)