NEW YORK (CNN/Money) - Treasury prices rebounded on Thursday as soft employment and price readings from a regional factory survey offset the impact of higher producer prices and lower jobless claims.

At around 3:45 p.m. ET, the benchmark 10-year note climbed 10/32 in price to 100-16/32 to yield 4.68 percent, down from 4.72 late Wednesday, and the 30-year bond rose 20/32 of a point to 100-8/32 to yield 5.36 percent, down from 5.41 percent late yesterday.

Bond prices and yields move in opposite directions.

The two-year note gained 2/32 of a point to 99-16/32 to yield 2.76 percent, while the five-year note rose 4/32 of a point to 100-13/32, with a yield of 3.91 percent.

The raft of figures had only a modest impact on bonds though, suggesting the market is poised for a period of range trading at least until the Federal Reserve's next meeting at the end of June.

Traders remain concerned that a spike in inflation could prompt the Fed to raise interest rates more forcefully than previously anticipated.

Still, the larger-than-forecast 0.3 percent gain in the core producer price index (PPI) for May was not enough to rattle investors, who know that wholesale cost increases can take time to filter through to consumers.

"I don't put a lot of faith in the PPI these days, with the delays due to calculation problems," Robert Macintosh, chief economist at Eaton Vance Management, told Reuters. "You need to really focus on the CPI and personal consumption."

Inflation gauges have become so key that bonds managed to cobble together modest gains despite a rise in the Philadelphia Fed's index of Mid-Atlantic manufacturing, in part because the survey's prices paid measure declined.

The Philly Fed's business conditions index rose to 28.9 in June from 23.8, and yet the prices paid measure slipped to 51.9 from 59.6. The employment index also moved lower to 16.8 from 22.6.

"We saw moderation in the indices on prices paid, employment, and six-month business conditions outlook," said Josh Stiles, senior bond strategist at IDEAglobal. "That offset the impact of the headline number."

Initial jobless claims for the most recent week dropped more than expected to 336,000 but the Labor Bureau said some of that fall was due to the national holiday last Friday for the funeral of former President Reagan.

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Markets in the U.S. are now confident the Fed will raise the targeted Federal Funds rate by only 25 basis points when it meets on June 29 and 30, but are far less sure how high rates will ultimately rise and how fast they will get there.

Fed Bank of Chicago President Michael Moskow has a chance to outline his own views on Thursday, but he is not speaking until 9:15 p.m. ET.

In the currency market, the dollar weakened against the euro and the yen. The euro bought $1.2061, up from $1.2008 late yesterday, and the dollar bought ¥109.63, down from ¥110.14 late Wednesday.