Forty-six Republican senators joined with two Democrats to filibuster the US$447bn (£287bn) package.

Reacting to the vote, Mr Obama said: "Tonight's vote is by no means the end of this fight."

Republicans oppose the measure citing its spending to stimulate the economy and its tax rise on millionaires. The US unemployment rate is jammed at 9.1%.

The package failed by a vote of 50 to 49, short of the 60 votes it needed to advance in the 100-member Senate.

The president has spent several weeks promoting the jobs bill in a campaign-style tour across the country.

But despite his efforts, he did not pick up a single Republican vote in the Democratic-controlled Senate on October 11.

Democrats Ben Nelson of Nebraska and Jon Tester of Montana, facing re-election next year in conservative states, also voted against the measure.

The American Jobs Act includes US$175bn in infrastructure spending and aid for local governments to avoid layoffs, as well as Social Security payroll tax cuts for workers and businesses.

Adopting a defiant tone after the vote, Mr Obama said he would work with Democratic Senate Majority Leader Harry Reid to see that individual proposals in the bill gained a vote as soon as possible.

The president told a union audience earlier in Pittsburgh, Pennsylvania. "I think they'll have a hard time explaining why they voted no on this bill - other than the fact that I proposed it."