On Friday, the Commerce Department announced that its preliminary Q4 GDP estimate is 2.8% — the fastest growth rate in 18 months but below economists’ estimates of 3%.

When you dig into the details of the GDP report, however, the number looks better, reflecting something like 4% growth in the private economy and -1% for government spending. Inventory growth added 2%, while an additional 2% came from consumer spending, but defense-spending cuts and lower government spending (mostly at the state and local level) subtracted about 1% from the overall GDP figure. The U.S. economy will keep growing this year, but due to the big distortion from inventory growth, gains are unlikely to exceed 3%.

Most of the other economic news last week was positive. The Conference Board announced on Thursday that its index of leading economic indicators (LEI) rose 0.4% in December, as seven of 10 LEI components were positive in December: the interest rate spread, jobless claims, manufacturing hours, stock prices, overall new orders, manufacturers’ new orders for nondefense capital goods (excluding aircraft) and manufacturers’ new orders for consumer goods and materials. One component remained unchanged (building permits), while two components — consumer expectations and a barometer of credit — declined.

On the bright side, one of those declining indicators, consumer expectations, has already turned sharply up in January. On Friday, the University of Michigan/Reuters consumer sentiment index surged to 75, up sharply from 69.9 in December, and a point above the economists’ consensus forecast of 74. Consumer sentiment is now at its highest level in a year, which bodes well for future GDP growth.

Also on Thursday, the Commerce Department announced that December durable-goods orders rose by a stronger-than-expected 3%, for the third straight monthly rise. “Core” orders (nondefense capital goods, excluding aircraft) were up a very healthy 2.9%. For the full year of 2011, core orders rose 10%!

On the jobs front, we learned that new weekly jobless claims rose 21,000, to 377,000, but that increase was expected after the previous week’s sharp decline. More importantly, the four-week moving average of new claims fell by 2,500, to 377,500.

We’ll learn more about jobs in Friday’s January payroll report.