We study experimentally the application of a class of entangled states, squeezed spin states, to the improvement of atomic-clock precision. In the presence of anisotropic noise, the entanglement lifetime is strongly dependent on squeezing orientation. We measure the Allan deviation spectrum of a clock operated with a phase-squeezed input state. For averaging times up to 50 s the squeezed clock achieves a given precision 2.8(3) times faster than a clock operating at the standard quantum limit.