US JOBLESS claims jumped to their highest level since October last week while food and energy costs lifted producer prices in December.
However, a surge in exports to their highest level in two years helped narrow the US trade deficit in November, an encouraging sign for fourth-quarter economic growth.
Despite a string of recent data that had signalled a pickup in the economy's momentum, the figures have shown that the job market continues to struggle.
The number of Americans filing for first-time unemployment benefits rose unexpectedly to 445,000 from 410,000 in the prior week, a Labor Department report showed.
It was the biggest one-week jump in about six months and confounded analyst forecasts for a small drop to 405,000.
The jobs data weighed on US stocks. Government debt prices traded little changed as concerns about Europe's debt struggles helped support the market.
"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 rebound in benefit claims came in the wake of the holidays, which may have hindered new applications and created a backlog.
Claims, which peaked around 650,000 in April 2009, had been on a downward trajectory, dipping below 400,000 for the first time in two years during the week of Christmas.
And in a separate dataset, US producer prices climbed 1.1 per cent in December after a 0.8 per cent rise in November, according to another Labour Department report.
Inflation excluding food and energy, however, rose just 0.2 per cent, in line with forecasts.
That left the year-on-year gain in core producer prices at 1.3 per cent, just below analyst estimates, helping tame inflation fears.
City A.M. Reporter