The U.S. economy created 146,000 new jobs and the unemployment rate slid to 7.7 percent, in a report much better than economists had expected.

Though most on Wall Street figured Superstorm Sandy to tamp down job growth, the Labor Department said the late-October storm that decimated the East Coast actually had little effect.

The government said the storm's impact might be more accurately gauged in next months' report. (Click here for the full report.)

Overall, the report was well ahead of forecasts of about 93,000 new jobs, but internally the numbers showed considerable weakness. (Read More: US Jobs Market 7 Percent Better Than Last Year)

"It's good news against expectations, but that's about it," said Steve Blitz, chief economist at ITG Investment Research.

The Labor Department statistics had some puzzling contradictions, particularly in the assertion that Sandy "did not substantively impact" the jobs count for November, and in considerable downward revisions from previous months.

Also, the drop in the unemployment rate appeared to reflect little more than a continued exodus of workers from the labor force.

The labor force participation rate, already around 30-year lows, fell further in the month to 63.6 percent. That represented 350,000 fewer workers.

In all, there were a net 122,000 fewer people with jobs.

An alternative measure of unemployment, which counts those who have given up looking for jobs as well as those working part-time for economic reasons, also edged lower to 14.4 percent.