The gain in the producer price index was the largest in more than four years but the spillover to consumer inflation may be limited.
The post-election boost to sentiment may have fizzled but February's reading was still among the five highest in the past decade.
The latest weekly jobless data indicate companies are "attempting to retain their workers in a tight labor market."
The stronger dollar, larger federal budget deficits, and low national saving rates could force further widening in the trade deficit.
The unemployment rate rose to 4.8% in January and wages increased by only 0.1%, dampening hopes for a March interest rate hike.
The broader trend remains weak, with productivity rising just 0.2% in 2016 from 2015, the smallest annual gain since 2011.
The Fed’s preferred measure of inflation rose 1.6% in December from a year earlier, its highest level since September 2014.
Growth eased from 3.5% in Q3 as a sharp drop in exports offset solid consumer spending and a pickup in business investment.
The Conference Board's index of leading economic indicators rose 0.5% in December, it's largest jump since April 2016.
But the agency also sees the deficit reaching $1.4 trillion, or 5% of GDP, by 2027, driving debt held by the public to the highest level since 1947.