Forty-six Republican senators joined with two Democrats to filibuster the $447bn 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.