WASHINGTON — It's the clearest sign yet the recession is finally ending: Employers laid off far fewer workers in July, the jobless rate dipped for the first time in 15 months and workers' hours and pay edged upward.

Those are the kind of figures that could give Americans the psychological boost necessary for recovery to take root after the worst recession since World War II.

A net total of 247,000 jobs were lost last month, the fewest in a year and a drastic improvement from the 443,000 that vanished in June.

The Labor Department's report yesterday showed that the unemployment rate dropped a notch to 9.4 percent in July, from 9.5 percent the previous month. Together with slight increases in the average workweek and wages, the new figures suggested the economy is in a transition from recession to recovery.

"The worst may be behind us," President Obama declared. "Today, we're pointed in the right direction."

Still, the job market remains shaky. A quarter-million lost jobs are a far cry from the employment growth needed to put the national economy on solid footing.

When the economy is healthy, employers need to add a net total of around 125,000 jobs a month just to keep the unemployment rate stable. And to push the jobless rate down to a more normal 5 percent range, it would take much stronger growth — at least 200,000 new jobs a month. Economists say it might take until 2013 to drive down the unemployment rate to 5 percent.

Yet the improvements in July could give some businesses the confidence to hire again — or at least not to lay off more workers. And consumers, less anxious about losing jobs, could respond by spending more freely.

"If people and companies think the worst is behind them — and it probably is — their confidence will be restored," said Richard Yamarone, economist at Argus Research. "That confidence can feed on itself."

On Wall Street, the report propelled stocks higher. The Dow Jones industrial average jumped 114 points, and other stock averages also gained.

Analysts say companies will keep cutting jobs probably through the rest of this year, though the pace of layoffs should continue to taper off. The beginnings of recovery could actually push the unemployment rate higher, since far more people would be energized to look for work again.

In fact, the main reason the unemployment rate declined last month was not an inspiring one: Hundreds of thousands of people, some discouraged by their failed job searches, left the labor force. The labor force includes only those who are either employed or are looking for work.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included the unemployment rate would have been 16.3 percent in July. All told, 14.5 million were out of work in July.

Job-seekers are finding it harder to get work because there are so few openings. A record 4.97 million people had been unemployed six months or longer in July. And the average length of unemployment grew to 25.1 weeks, also a record.

For those with jobs, the latest report was more heartening. With companies feeling a bit better about the economy's prospects and their own, employees got to work more hours and saw their paychecks grow.

The average work week rose to 33.1 hours, after having fallen to 33 hours in June, the lowest in records dating to 1964. That increase could signal new hiring later on because companies typically ask their existing staff to work longer hours before they decide to hire more people.

And employers bumped up wages. Average hourly earnings rose to $18.56 in July from $18.53 in June. Average weekly earnings rose to $614.34.