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First-time claims for U.S. unemployment benefits fell by much more than expected in the week ended August 17, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims dropped to 209,000, a decrease of 12,000 from the previous week's revised level of 221,000.

Economists had expected jobless claims to dip to 216,000 from the 220,000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average inched up to 214,500, an increase of 500 from the previous week's revised average of 214,000.

The report said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, tumbled by 54,000 to 1.674 million in the week ended August 10th.

The four-week moving average of continuing claims slipped to 1,697,000, a decrease of 750 from the previous week's revised average of 1,697,750.