With less than a week to go before the Federal Reserve announces its next interest rate decision, Wall Street has reviewed a bevy of economic indicators released this week.

That data indicates that the Federal Reserve is still likely to hold rates steady next week, some investors say. But they add that there are pockets of strength in the economy that suggest markets don't have the all-clear.

Here's the breakdown.

Inflation: US inflation climbed 3.7% in August from the prior year, marking an acceleration for the second consecutive month, according to the latest Consumer Price Index. Prices increased 0.6% month-over-month compared to a 0.2% increase in July.

Core inflation, which does not account for volatile food and energy prices, continued to decelerate.

"Ultimately, this release showed that there is still real work to be done to get inflation back to the Fed's 2% target," said Sam Millette, fixed income strategist at Commonwealth Financial Network.

Wholesale inflation also sped up for the second straight month, rising to 1.6% from 1.3% for the 12-month period ended in August. Price increases ticked up to 0.7% on a monthly basis, marking the largest one-month gain since June 2022.

Small businesses are feeling pressure from consistently high prices. Optimism among more than 600 small businesses surveyed by the National Federation of Independent Business fell last month from July, breaking a three-month streak of brightening sentiment.

Mortgage rates: The 30-year fixed-rate mortgage averaged 7.18% for the week ending September 14, rising from 7.12% the prior week. That's up from 6.02% a year prior, as persistent inflation and the economy's strength keep rates higher.

Consumer strength: Retail sales, which are adjusted for seasonal swings but not inflation, picked up speed in August from July, logging their fifth consecutive month of growth. The increase was largely due to higher spending at gas stations as oil prices spiked on production cuts by Saudi Arabia and Russia and robust demand.

Excluding the boost from gas station sales, retail spending added 0.2% in August from July. Retail spending also rose across most categories.

That suggests that retail sales are reaching a more moderate pace of growth, as consumers face challenges ahead including a restart in student loan payments next month and a continued drain in their savings from the height of the pandemic.

Still, that doesn't mean that the consumer has suddenly run out of steam: "The retail sales report is not designed to capture many recent consumer mega-trends, like the strong summer travel season, the [Taylor Swift] Eras Tour or Barbenheimer [at the movies]," said Bill Adams, chief economist at Comerica Bank.

What does it all mean? While inflation is much lower than it was last year, it remains far above the Fed's 2% target, which Chair Jerome Powell reaffirmed last month at the central bank's annual symposium in Jackson Hole, Wyoming.

Traders see a roughly 97% chance that the central bank keeps rates unchanged in September, according to the CME FedWatch Tool. But they remain split on whether the Fed will continue to hold rates steady or hike more for the rest of the year.

"Whether rates remain higher for longer, or the inflation target becomes more flexible, the bottom line is that costs are still high, still rising, and still a problem," said Liz Young, head of investment strategy at SoFi, in a blog post on Thursday.

European Central Bank raises rates to record high and signals end of hikes

The European Central Bank raised interest rates by a quarter of a percentage point to 4% Thursday and hinted it was done with its protracted campaign of rate hikes to tame stubborn inflation, reports CNN's Olesya Dmitracova.

The central bank has now raised its main interest rate at 10 consecutive meetings, taking it to the highest level since the launch of the euro currency in 1999. The next step is to keep borrowing costs at that level, the ECB suggested.

Based on its current assessment, key interest rates "have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target," the bank said in a statement.

Annual inflation in the 20 countries that use the euro had been slowing until last month, when it remained stuck at 5.3%, well above the ECB's 2% target, as energy costs rose. There are signs, however, that successive rate increases are constraining economic activity.

Read more here.

Extreme weather could cost the global fashion industry $65 billion by 2030

Extreme heat and flooding are set to deal a massive blow to the global fashion industry, reports CNN's Michelle Toh.

Four of the world's top garment producing countries are at risk of missing out on $65 billion in earnings by 2030, according to a study from Cornell University and investment manager Schroders.

Bangladesh, Pakistan, Vietnam and Cambodia are seen to be particularly at risk, with a 22% drop in earnings from exports — and wider economic hit — projected by the end of the decade, according to the findings, which were released Wednesday.

Fashion brands that source extensively in these countries should alter work hours and ensure workers get enough rest and hydration in response to the predicted disruption, according to researchers from Schroders and Cornell's Global Labor Institute.

Read more here.