California reported its second-highest number of COVID-19 deaths on Thursday, while the rates of new coronavirus infections and hospitalizations continue to drop.

The total of 737 new deaths is second to the record 764 reported Jan. 22, according to the state Department of Public Health.

California’s death toll since the start of the pandemic rose to nearly 39,000, while total cases topped 3.1 million.

Hospitalizations and newly confirmed cases have been falling, however, and health officials are growing more optimistic that the worst of the latest surge is over.

The number of people in the hospital with COVID-19 has slipped below 16,250 statewide, a drop of more than 20% in two weeks.

The nearly 17,000 new cases reported Thursday are about one-third the mid-December peak of 54,000. In the last week the state averaged about 21,000 new cases per day, more than 5,000 fewer than the prior week.

The positivity rate for people being tested has been falling for weeks, which means fewer people will end up in hospitals.

In Los Angeles County, the state’s most populous, the seven-day average of daily positive cases hit about 6,560 on Jan. 22 — down from the peak of more than 15,000 on Jan. 8, said county health director Barbara Ferrer.

“We still have a long way to go before we can resume our usual activity,” Ferrer said on Wednesday, urging residents to continue adhering to mandates requiring masks and social distancing.