President Barack Obama, citing fresh evidence that the recession is winding down, says the country's future economic prosperity depends on building a new, stronger foundation and recapturing the spirit of innovation.

"Innovation has been essential to our prosperity in the past, and it will be essential to our prosperity in the future," Obama said in his weekly radio and Internet address.

The president cited Friday's Commerce Department report showing that in the last few months the economy overall has done "measurably better than expected". He credited his $787 billion economic stimulus programme for much of that progress.

"This and the other difficult but important steps that we have taken over the last six months have helped put the brakes on this recession," Obama said. He mentioned his administration's efforts to limit home foreclosures and unlock frozen credit markets to encourage lending to people and businesses, along with the mixture of tax cuts and spending included in the stimulus programme.

Obama reminded the nation that full recovery will not happen overnight, but rather will take many more months.

"Even as we rescue this economy, we must work to rebuild it stronger than before," he said. "We've got to build a new foundation strong enough to withstand future economic storms and support lasting prosperity."

That means having the best-educated, highest-skilled workers in the world, a health-care system that fosters innovation by holding the line on costs, building a clean energy economy and investing in research and development," Obama said.

Vehicle industry layoffs

Obama said he will discuss the foundation he wants when he makes a second visit to Elkhart, Indiana, on Wednesday. Layoffs in the recreational vehicle industry account for much of the job loss in northern Indiana, which is struggling with an unemployment rate near 17 per cent.

"For communities like Elkhart to thrive, we need to recapture that spirit of innovation that has always moved America forward," he said.

Obama was headed to the presidential retreat Camp David for the weekend, and was not expected to participate in the sessions.