Here's the analysis from Wells Fargo that came out moments ago:
Real Final Sales Up on Consumer and Residential Investment
Obviously, defense spending overstated third quarter GDP and depressed fourth quarter GDP. Therefore, we reemphasize the point that real private final sales to domestic purchasers provide a good benchmark for the underlying strength of the economy and remove some of the volatility due to inventory swings and government spending. Real private domestic final sales illustrate two characteristics of the U.S. economy today that are often lost in the hype of GDP. First, note the relative stability of sales over the past few years. There is a sense that underlying domestic demand has been remarkably stable overall while relative strength has shifted between sectors. Second, note how the pace of sales in the current expansion has clearly downshifted from prior expansions. This reinforces a theme we have often presented that growth in the current expansion has indeed settled into a slower growth pattern compared to the past and the expectations (hopes) of some analysts.
The Pluses: Consumer Spending and Housing—Yes, Housing
Personal consumption and residential investment carried the water in the fourth quarter. Personal consumption was up 2.2 percent in the fourth quarter and up 1.9 percent during all of 2012. Real disposable income grew 1.5 percent in 2012 and we expect it to return to that growth rate in the second half of 2013 after the hit from higher payroll and income taxes in the first half of this year. Residential investment registered double-digit gains in the second half of 2012 and we expect that momentum to remain in 2013. We anticipate that housing starts will pick up to a one million-unit pace by the fourth quarter of this year compared to a 900,000-unit pace in the fourth quarter of 2012. Earlier this week, the Case-Shiller Home Price Index was up 5.5 percent year over year for November—a very good sign.