North Korea is notorious for inflammatory, warlike rhetoric against its rivals South Korea and the US but had rarely used racial slurs in its verbal attacks.
Pyongyang's tone has grown angrier in recent weeks as it threatens to conduct a fourth nuclear test.
In a lengthy May 2 dispatch released only in Korean, Pyongyang's Korean Central News Agency published comments from a factory worker who said Obama has the "shape of a monkey" and made many other crude insults.
Marie Harf, a State Department spokeswoman, said yesterday that the North Korean dispatch was "offensive and ridiculous and absurd."
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"I don't know how many words I can use up here to describe the rhetoric ... It's disgusting," she told reporters at the Foreign Press Centre in Washington.
The North's rhetoric against Obama and South Korean President Park Geun-hye intensified after they held a summit in Seoul late last month.
Recent state media dispatches criticising Park are full of sexist tirades such as "old prostitute coquetting with outside force.