Watch Video of State of the Union: President Obama Focuses on Economy 

President Barack Obama used his State of the Union address to call for renewed focus on job creation and investment to boost the fragile economy.

President Barack Obama focused on job creation and the economy in Tuesday night's State of the Union address, which sets out the president’s goals for the year ahead.

Obama defended the role of the government in improving the lives of “the many, and not just the few,” but at the same time he said he does not want to increase the deficit "by a single dime."

"It is our unfinished task to restore the basic bargain that built this country – the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, what you look like, or who you love," Obama said.

"It is our unfinished task to make sure that this government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation."

But he added: "Nothing I’m proposing tonight should increase our deficit by a single dime. It’s not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth."

Obama also called for investment in manufacturing, education, infrastructure and energy projects to boost the fragile economy.

He also called for a renewed focus on job creation in a country where the unemployment rate hovers near 8 percent.

"Our first priority is making America a magnet for new jobs and manufacturing," Obama said.

Obama also announced talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union "because trade that is free and fair across the Atlantic supports millions of good-paying American jobs."

Other key topics were avoiding the so-called “sequester” – $85 billion in across-the-board spending cuts that are due to begin on March 1 – and persuading recalcitrant lawmakers to back his policies on climate change, immigration and gun control.

"Most Americans – Democrats, Republicans, and Independents – understand that we can’t just cut our way to prosperity," Obama said.

On foreign policy, Obama condemned North Korea’s latest nuclear test. He said such actions will "only isolate them further" and vowed the US would "lead the world in taking firm action in response to these threats."

He also announced the withdrawal of 34,000 US troops from Afghanistan within the year, slashing the force by nearly half.

Obama received a standing ovation when he called for tougher gun control laws, urging universal background checks on prospective gun buyers and the limitation of massive ammunition magazines.

"Each of these proposals deserve a vote in Congress. If you want to vote no, that's your choice. But these proposals deserve a vote," Obama said.

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