The U.S. economy grew at a 2.8 percent annual rate in the last three months, largely thanks to a mix of consumer spending, corporate investment and homebuilding. It was an increase from last quarter's meager 1.8 percent growth but below analyst expectations of 3 percent growth, the rate that typically prompts hiring by employers. Here's what econ reporters are teasing out of the Commerce Department report:

Consumer spending Consumer spending rose to a 2 percent annual rate up from a 1.7 percent rate in the previous quarter. Tracking the performance of the best performing businesses, The New York Times reports that "individual companies like General Electric and Lockheed Martin closed the year with record order backlogs, a sign that, at least for some businesses, demand is so strong that they cannot produce quickly enough. The backlogs portend solid manufacturing growth going forward, and suggest to some economists that the United States could weather the euro crisis relatively unscathed after all." Harley Davidson, the nation's largest motorcycle maker, said sales increased 12 percent. “We feel great about where we see retail sales in the U.S., but certainly remain cautious as we look forward, given the tentative nature of the overall economy and consumer confidence,” John Olin, chief financial officer of Harley- Davidson Inc., said, as quoted in Bloomberg. The AP adds that "People are buying more cars, and consumer confidence is rising. Even the depressed housing market has shown enough improvement to make some economists predict a turnaround has begun."

Corporate investment Another positive sign for the end of 2011: "Companies invested more in equipment and machinery in December," according to the AP. "The unemployment rate fell to 8.5 percent last month — the lowest level in nearly three years — after the sixth straight month of solid hiring." On the inventory side, Reuters notes that the economy "got a temporary boost from the rebuilding of business inventories, which was the fastest since the third quarter of 2010, after they declined in the third-quarter for the first time since late 2009. Inventories increased $56.0 billion, adding 1.94 percentage points to GDP growth. Excluding inventories, the economy grew at a tepid 0.8 percent rate, a sharp step-down from the prior period's 3.2 percent pace."
 
Homebuilding Bloomberg looks at positive signs in housing numbers noting that the industry seems to be stabilizing. "Construction of residential real estate climbed at an 11 percent annual rate, the best performance since the second quarter of 2010. For all of 2011, the industry shrank 1.4 percent, the smallest decline since 2005, the last year homebuilding grew." 
 
Overall, the Journal notes that "a sturdier recovery took hold despite troubles in other parts of the world" while Bloomberg warns that "A deepening crisis in Europe may also hinder expansion."