"This morning we received additional signs that the worst may be behind us," said Obama in remarks relocated from a military barracks to the ceremonial surroundings of the sun-drenched White House Rose Garden.
"We are losing jobs at less than half the rate we were when I took office. We have pulled the financial system back from the brink," said Obama, warming to a counter-attack against Republican assaults on his economic policies.
The president argued that his mammoth 787-billion-dollar stimulus plan, financial industry rescues and mortgage crisis measures had revived credit markets, and boosted stock markets on which Americans rely for pensions.
"While we have rescued our economy from catastrophe, we have also begun to build a new foundation for growth," Obama said, but he also warned that tough times lay ahead before the economy would be restored to full prosperity.
"We have a steep mountain to climb and we started in a very deep valley.
"We have a lot further to go. As far as I'm concerned, we will not have a true recovery as long as we're losing jobs, and we won't rest until every American that is looking for work can find a job."
The Labor Department's much-awaited monthly report was better than expected by private economists, who had forecast a loss of 325,000 jobs and a jobless rate rising to 9.6 percent from the June level of 9.5 percent.
Last week, in another ray of hope, the government estimated that the economy contracted 1.0 percent in the second quarter, better than forecasters had expected.
Tentative signs of a turnaround come at a key moment for Obama's presidency, now 200 days old, as he faces increasing opposition from Republicans and health industry lobbyists over his healthcare reform drive.
The administration and opponents are gearing up for a ferocious August of campaigning, which many observers believe could seal the fate of a reform that has confounded several previous Democratic presidents.
A sharp increase in already dire unemployment levels could have skewed the argument against Obama and further threatened his program.
White House spokesman Robert Gibbs cautioned that the respite in the unemployment figures notwithstanding, Obama still expected the rate to climb above the politically perilous 10 percent barrier this year.
"The pace of job loss is declining and that is positive," Gibbs said. "None of us loses sight though that last month a quarter of a million people lost their job."
"The long-term unemployment rate is increasing," Gibbs said. Asked whether Obama still saw the jobless rate hitting 10 percent this year, he said "yes."
But the data appeared to give the president breathing room, in a week in which there was incremental progress on health reform in Congress, lawmakers extended a 'cash for clunkers' vehicle sales program and former president Bill Clinton won the release of two US journalists jailed in North Korea.
"I think the president's had a pretty good week... we'll take this week," said Gibbs.
Wall Street also welcomed the job figures. US stocks surged to new 2009 highs with the Dow Jones up 1.21 percent to close at 9,368.26 and European bourses enjoying strong rallies after news of the report broke.
Obama cranked up his counter-attack as a new poll suggested voter patience may be wearing thin with his economic rescue effort, with his once sky-high job approval rating slumping to 50 percent, the lowest since his inauguration.
The Quinnipiac University poll found 2,409 registered voters nationwide disapproved 49-45 percent of the way Obama was handling the economy, and disapproved 52-39 percent on stewardship of healthcare reform.
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