President Obama says his administration has rescued the U.S. economy from catastrophe. "Today, we are pointed in the right direction. We are losing jobs at less than half the rate we were when I took office," he said.

U.S. stocks soared on Friday on news from the Labor Department that fewer jobs are being lost than earlier in the recession.

U.S. employers cut 247,000 positions in July, the smallest reduction of any month this year. The unemployment rate dipped from 9.5 percent in June to 9.4 percent in July. White House officials call it the least bad report in a year, but they say the president expects unemployment to top 10 percent in the coming months.

Global economist Jay Bryson, with Wells Fargo Securities in Charlotte, North Carolina, agrees with the administration that a full recovery, including widespread job creation, is still far away. "The massive job losses that we saw earlier this year are starting to come to an end, but I do not think we are looking for positive employment growth any time soon, probably well into next year," he said.

While the White House says the $787 billion Recovery Act, passed in February, has stabilized the economy, Bryson says the initiative has done little to stimulate it. "Tax cuts that were put into effect earlier this year have stabilized consumer spending, and that certainly has helped, but a lot of the bigger-ticket infrastructure projects have not really gotten underway yet," he said.

Despite Friday's encouraging news, Mr. Obama says he will not be satisfied until the U.S. is seeing sustained job growth. "It will not be easy, though. Change is hard, especially in Washington. We have a steep mountain to climb, and we started in a very deep valley," he said.

The president is campaigning for policy changes on health care, education and energy, which he says will contribute to the nation's economic recovery.