WASHINGTON (Reuters) – The number of Americans filing applications for jobless benefits tumbled to near 49-year lows last week, which could ease concerns about a slowdown in the labor market and economy.

Other data on Thursday showed import prices dropping by the most in more than three years in November as the cost of petroleum products tumbled and a strong dollar weighed on prices of other goods, pointing to subdued imported inflation.

Tightening labor market conditions bolster expectations that the Federal Reserve will raise interest rates at its Dec. 18-19 policy meeting. With inflation likely to remain tame through the first half of 2019, economists see fewer rate hikes next year.

The Fed has increased borrowing costs three times this year.

Initial claims for state unemployment benefits dropped 27,000 to a seasonally adjusted 206,000 for the week ended Dec. 8, the Labor Department said on Thursday. Last week’s decline in claims was the largest since April 2015. Claims hit 202,000 in mid-September, which was the lowest level since December 1969.

Data for the prior week was revised to show 2,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims falling to 225,000 in the latest week. Claims shot up to an eight-month high of 235,000 during the week ended Nov. 24.

The Labor Department said only claims for Virginia were estimated last week.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,750 to 224,750 last week.

While difficulties adjusting the data around holidays likely boosted applications in prior weeks, there were worries the labor market was losing momentum given financial market volatility, the fading stimulus from a $1.5 trillion tax cut package and the Trump administration’s protectionist trade policy.

Last week’s sharp drop in claims also suggests a slowdown in job growth in November was likely the result of worker shortages. Nonfarm payrolls increased by 155,000 jobs after surging by 237,000 in October.

With the unemployment rate near a 49-year low of 3.7 percent, Fed officials view the labor market as being at or beyond full employment.

U.S. Treasury yields briefly edged up after the data. U.S. stock index futures were trading higher while the dollar .DXY was slightly stronger against a basket of currencies.

SUBDUED IMPORTED INFLATION

In a second report on Thursday, the Labor Department said import prices dropped 1.6 percent last month, the biggest decline since August 2015, after an unrevised 0.5 percent increase in October.

Economists polled by Reuters had forecast import prices decreasing 0.9 percent in November.

In the 12 months through November, import prices rose 0.7 percent. That was the smallest annual increase since November 2016 and followed a 3.3 percent rise in October.

The report came on the heels of data showing weak overall producer and consumer inflation readings in November. It supports economists’ expectations that inflation could remain moderate through the first half of 2019.

The Fed’s preferred inflation measure, the core PCE price index excluding food and energy, increased 1.8 percent on a year-on-year basis in October, the smallest gain since February, after rising 1.9 percent in the prior month.

It hit the U.S. central bank’s 2 percent target in March for the first time since April 2012. Most economists expect the Fed will raise interest rates twice next year, although traders expect no more than one rate increase.

Last month, prices for imported fuels and lubricants tumbled 11.0 percent after rising 3.2 percent in October. Prices for imported petroleum plunged 12.1 percent, the biggest drop since January 2016, after increasing 2.7 percent in October.

Oil prices have fallen by a third since the start of October amid concerns about oversupply and a slowing global economy.

Food prices declined 2.2 percent in November, reversing October’s 2.2 percent gain. Excluding fuels and food, import prices fell 0.2 percent last month after being unchanged in October. The so-called core import prices rose 0.4 percent in the 12 months through November.

The weak core import price readings reflect the strong dollar, which has gained about 8.0 percent this year against the currencies of the United States’ main trade partners.

The report also showed export prices fell 0.9 percent in November, the biggest drop since January 2016, after climbing 0.5 percent in October. A 1.8 percent rebound in prices of agricultural exports was partly offset by a 1.0 percent drop in prices of nonagricultural goods.

Export prices increased 1.8 percent on a year-on-year basis in November after rising 3.1 percent in October.