Here's what we know now about fourth quarter earnings. They're not bad. If anything, they're a bit better than what analysts had expected when the year began.

If you look at results from Standard & Poor's 500 ($INX) companies that have reported quarterly results so far, earnings are up 7.4% from a year ago.

That's much higher than what analysts were expecting on Jan. 1 -- a 2.8% growth.

While revenue isn't quite so rosy, it is also better than expectations.

For those that have reported, it's so far up 3.2% from a year ago, better than the Jan. 1 estimate of 1.9%, according to Thomson Reuters.

And when the season is done, according to Thomson Reuters, look for earnings to be up 5.3% from a year ago.

Still, earnings expectations in January were muted compared to earlier expectations. Last April and July, analysts were really bullish, expecting fourth-quarter earnings to rise 16.3% and 13.7%. Revenue, on the other hand, should show 3.9% growth, which is actually better than estimates in April and July.

So, what happened? The economy appeared to slow down in the third quarter and the worries about the fiscal cliff -- the possibility of big tax increases and spending cuts -- grew, says Thomson Reuters' Greg Harrison. In response company managements cut their guidance for the fourth quarter, if they offered any guidance at all.

Some sectors have seen surprisingly strong earnings compared with what Wall Street had expected.

Consumers, meanwhile, largely ignored the fiscal cliff worries or assumed the problem would get kicked down the road at the very least. As a result, fourth-quarter retail sales weren't bad. Auto sales were strong. Even real estate showed signs of life.

The retail picture will become clearer this week and next. On Thursday, General Motors (GM) will report fourth-quarter results and should show strong North American sales and offer continued bullishness.

Next week will bring results from the likes of Nordstrom (JWN), Wal-Mart Stores (WMT) and Abercrombie & Fitch (ANF). In addition, Lithia Motors (LAD), a Western chain of auto dealerships, will report on Wednesday.

Harrison is expecting double-digit earnings growth from consumer discretionary companies, which are predominantly are retailers. Apparel earnings should be up 12% from a year ago. Internet retailers should report 21% growth.

And the momentum may roll over into 2013. That assumes the economy gets past sequestration. That's the automatic defense and non-defense spending cuts that no one wants but is a part of the 2011 budget agreement.

Unfortunately, Republicans and Democrats are only now starting to talk about a resolution, and the cuts may hit the economy starting on March 1.