* U.S. jobless claims bounce off 5-year low * Chicago PMI index at highest in January since April * Nonfarm payrolls data awaited on Friday By Luciana Lopez and Chris Reese NEW YORK, Jan 31 (Reuters) - U.S. Treasuries were little changed in price on Thursday after data painted a mixed picture of the U.S. economy, with uncertainty about growth in coming quarters keeping yields within recent ranges. Investors also looked ahead to key nonfarm payrolls data on Friday for more light on whether jobs are increasing fast enough to satisfy policymakers. Initial weekly jobless claims rose off five-year lows to levels consistent with tepid job growth, data showed on Thursday, with claims rising more than expected. Data also showed U.S. income growth surged in December as companies hurried to make dividend payments before higher tax rates set in, while the pace of business activity in the U.S. Midwest picked up in January from a more than three-year low the month previous. "The bond market faces some headwinds in its conflict with the direction of the economy and how much risk-on versus risk-off is appropriate. So far this year, data is all over the board and investors are torn between what they are hoping for and what they are seeing," said Kevin Giddis, managing director of fixed income at Morgan Keegan in Memphis, Tennessee. Benchmark 10-year Treasury notes were trading 1/32 higher in price on Thursday with the yield little changed from late Wednesday at 1.99 percent. Ten-year yields continued testing the 2 percent level, as they have since Monday, but found traction difficult. While the easing of global stresses, including the euro zone debt crisis, means that "people aren't really desperate to own Treasuries," there are still question marks keeping investors wary, said Kim Rupert, managing director of global fixed income analysis at Action Economics LLC in San Francisco. From the possibility of automatic spending cuts at the start of March to lingering worries that the Fed will at some point cut off its easing spigot, investors are reluctant to push Treasuries outside recent ranges, she said. "We're still just trying to get a clean reading, but it doesn't look like growth is going to pick up substantially anytime soon," she said. Ten-year Treasuries could see yields within the range of around 1.70 percent to 2.10 percent in coming sessions, said William O'Donnell, head of U.S. Treasury strategy at RBS Securities in Stamford, Connecticut. Recent higher yields have lured some investors back into buying, he said. "I think people like the levels." Thursday's data came after the U.S. Federal Reserve ended a two-day meeting on Wednesday by leaving in place its $85 billion per month asset buying program as the economy was paused. After a week packed with economic data, including disappointing fourth-quarter U.S. growth domestic product and the Fed meeting, investors are now turning their attention to the last major milestone of the week: nonfarm payrolls data on Friday. The median of forecasts from analysts polled by Reuters is for U.S. employers to have added 160,000 new jobs in January, up slightly from 155,000 new positions in December. The unemployment rate is expected to be unchanged from 7.8 percent in December.