The Department of Labor reported this morning that the number of people seeking first-time claims for unemployment insurance benefits fell a seasonally adjusted 50,000 for the week ending Jan. 14 from the previous week's revised number of 402,000. The four-week moving average that analysts prefer because it flattens volatility in the weekly figures fell 3,500 to 379,000. The claims level is the lowest since the second week of April 2008.

A consensus of experts surveyed ahead of time by The Wall Street Journal had estimated a drop of 19,000. High volatility is common in the claims numbers this time of year, and because of the Martin Luther King holiday, the government had to use estimates for seven states. If the number holds up and claims remain in the vicinity of where they are now for another week, it will certainly firm up the cautious optimism that many analysts have been displaying toward a job market that has been stuck at a level that is barely absorbing the growth in the working-age population.

Continuing claims, which are reported with a one-week lag, clocked in 215,000 lower at 3,432,000. When federally extended claims are included, however, the number of Americans collecting unemployment benefits rose to 7,826,665, an increase of 493,566 from the previous week. Those claims are reported with a two-week lag.

While the drop in claims could be an omen of good news, just how far away anything approaching full recovery from the worst recession since the 1930s is was confirmed in a report by IHS Global Insight released to the U.S. Conference of Mayors on Wednesday. Only 26 of 363 U.S. metropolitan areas have seen employment rebound to the pre-recession peak in late 2007, the report stated.