The private sector created 215,000 new jobs in December, much more than the 133,000 jobs economists had expected, and a sharp increase from the previous month, according to the report.
The biggest gains were in the category of trade/transportation/utilities, which grew by 53,000.
Gains in construction hiring were also robust, with 39,000 positions added in December, the U.S. jobs report said.
The healthy showing in this struggling sector was attributed mostly to relief work after Hurricane Sandy. But the slow, yet steady recovery in the housing market also deserves some of the credit.
Medium-sized businesses led job creation, adding 102,000 new jobs. Large businesses followed with 87,000 new jobs.
Bucking the trend was manufacturing; the sector shed 11,000 positions while service providers increased headcount by 187,000, according to data from Moody's Analytics.
The strong showing was a surprise, given months of cautionary words from a bevy of analysts and the Congressional Budget Office.
The analysts and the CBO had warned the fiscal cliff saga would lead to massive job losses and cutbacks in business expansion, hiring and investment.
"The most surprising thing is that despite all the brinkmanship over the fiscal cliff drama and the debate about that, businesses didn't change their hiring plans. They seemed to slow up their investment spending but not on their hiring, so that's very, very encouraging," Mark Zandi, Moody's Analytics chief economist, told CNBC.
A federal mediator Friday announced a temporary solution: The strike, scheduled to take effect Dec. 30, will be delayed until Jan. 28 unless dock workers and management agree on payment issues.
"While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period," George Cohen, director of the Federal Mediation and Conciliation Service, said in a statement.
But, if negotiators representing longshoremen on one side and shipping companies and port terminal operators on the other can't come to an agreement by Jan. 28, 2013, a port strike could cripple the U.S. economy, which may already be hobbled by falling off of the fiscal cliff.
In today's just-in-time, minimal inventory world, a dock strike would mean that stores would quickly run out of certain non-perishable imported products including clothing, shoes and electronics.
For example, Wal-Mart Stores Inc. (NYSE: WMT), which relies heavily on goods imported from China, could fail to receive merchandise on time, particularly on the East Coast. And auto manufacturers, especially those such as BMW that assemble cars in the U.S. from imported kits, could quickly find themselves running out of parts.
Given the uncertainty surrounding the fiscal cliff and how it has weighed on economic activity, "The last thing the nation needs right now is a strike that would shut down the East Coast and Gulf Coast ports," Jonathan Gold, vice president for supply chain policy at the National Retail Federation, told The New York Times. "This will have a huge ripple effect throughout the economy."