"I'm convinced that we can see a light at the end of the tunnel ... We have pulled the economy back from the brink," he said at the White House.
But, he said, "we have a lot further to go. We will not have a true recovery while we are still losing jobs."
The Obama administration has faced criticism from Republican opponents who say that a $787bn fiscal stimulus plan passed by the Democrat-controlled congress has done little to shore up the US economy.
The three main US stock indexes increased by at least 1.5 per cent in morning trade on the back of the labour department figures.
The number of people who lost their job in July stood at 247,000, the labour department report said - far below the average prediction of 325,000 by economic analysts.
The figures showed that the number of unemployed people in the US has stood at 14,462,000 at the end of July, from 14,729,000 in June.
The report "confirms that the recession is certainly diminishing in intensity if it hasn't ended already," Peter Kretzmer, a senior economist at Bank of America, said.
"It appears unemployment may have hit its peak. We are starting to see the signs of a turning point, but it will take some time for job losses to diminish."
The number of people in employment has fallen by 6.7 million since the recession began in December 2007, the labour department says.
The fall in the monthly jobless rate is the first to occur in 15 months, but the July figures showed that the US labour force fell by 422,000 as discouraged workers left the labour market.
Eugenio Aleman, a senior economist at Wells Fargo, warned that unemployment could creep over 10 per cent.
"I was surprised about the unemployment number coming down to 9.4 per cent, but that was because of people dropping out of the labour force, so that is probably not going to be repeated in the future," Aleman said.
The jobless rate will probably rise in forthcoming months because "people who have been out of the labour force are going to come in because of better job prospects", and then discover that they cannot find work, he said.