NEW YORK (CNNMoney.com) - Bonds drifted Thursday after a handful of economic releases gave a mixed reading on inflation pressures and blurred the rate hike outlook. Meanwhile, the dollar edged higher.

The benchmark 10-year note added one tick to 110-10/32 to yield 4.46 percent, up from 4.45 late Wednesday. Just before the reports were released, the benchmark note was trading up 7/32 of a point to yield 4.43.

The 30-year bond added 4/32 of a point to 110-19/32 to yield 4.65 percent, up from 4.62 the previous session. Bond prices and yields move in opposite directions.

In shorter-dated debt, the two-year and five-year notes were little changed, both yielding 4.37 percent. Shorter dated debt had also been trading higher before the morning's spate of economic reports.

The closely-watched consumer price index (CPI) for November showed the largest overall drop in prices in 56 years, thanks to retreating fuel prices. At the same time, the core reading, which excludes volatile food and energy prices, met Wall Street expectations. (Full story)

The numbers looked good for inflation fighters, and if CPI had been the morning's only report it may well have stoked another bond rally. Bond investors loathe inflation because it erodes the value of fixed income investments. But economic releases that came out alongside the consumer price report kept a rally at bay.

Output from factories, mines and utilities rose 0.7 percent in November, a Federal Reserve report showed Thursday, outpacing expectations for a climb of 0.5 percent. Moreover, closely watched business capacity use, a measure of how fast industry is running, rose to a rate of 80.2 percent. (Full story)

"If you look at the recent Fed statement, it also said that a high resource utilization rate could hurt the economy," said Anthony Crescenzi, chief bond market strategist at Miller Tabak & Co. "Today's data shows a very high utilization rate."

In addition to evidence that New York manufacturers are firing on all cylinders, Crescenzi said that the weekly jobless report was relatively benign even though it did show a slightly higher-than-expected number of claims filed. (Full story)

The NY Empire State manufacturing index rose six points to 28.7 -- well above expectations and the strongest in 17 months as new orders rode higher to 30, and shipments and employment fell off.

The combined effect of the reports signaled to traders that the economy is not out of the inflation woods yet.

Despite the rise last week, the figure matches the four-week average, and the labor market remains strong as the hurricane effects on initial claims diminish.

Earlier in the week, bond traders cheered the Federal Open Market Committee's decision to raise the key overnight lending rate by a quarter of a point Tuesday afternoon to 4.25 percent, its 13th consecutive quarter-point hike since June 2004.

While the rate move came as little surprise, the committee at last changed the way it worded its statement, signaling to investors that the steady increases may slacken because inflation is in hand. (Click here for the full Fed statement.)

The dollar took a hit, as rising interest rates generally help the greenback by making dollar-denominated securities more attractive to foreign investors.

But the dollar regained some ground after Thursday morning's reports brought the possibility of more rate hikes back into the picture.

The euro bought $1.1999, down from $1.2004 late Wednesday. The dollar bought ¥116.10, still down from ¥117.43 posted the previous session, but off lows posted before the CPI and New York manufacturing releases.

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Click here for more on the Fed decision.

Click here for bond charts.