The jobs report surprises Wall Street – here’s what it means for your 401(K), loans and mortgages

The U.S. economy far exceeded expectations for job growth last month, according to new data released Friday.

According to the Bureau of Labor Statistics, employers added an estimated 254,000 jobs in September.

This is much higher than August’s job growth of 159,000 and exceeds economists’ expectations that there would be a gain of 140,000 jobs.

The unemployment rate also fell to 4.1 percent, despite forecasts that it would remain stable at 4.2 percent.

Stock prices surged following the blockbuster report, giving Wall Street further confirmation that the job market is on solid ground. Rising stocks are also good news for Americans’ 401(K) balances, which tend to be invested in major indexes.

S&P 500 futures rose 0.7 percent, while futures tied to the Dow Jones Industrial Average gained 0.5 percent.

The premarket advances marked a significant turnaround for Wall Street after rising geopolitical tensions caused a rocky start to October.

The report also revised job growth figures from August and July. This increased the total by 17,000 to 159,000 in August and 55,000 new jobs were created in July, bringing monthly growth to 144,000.

These upward revisions are likely to ease concerns about the state of the labor market and the Federal Reserve’s likely move to a slower pace of interest rate cuts following last month’s record cut.

The September rate cut brought interest rates down to 4.75 percent to 5 percent, making it cheaper for consumers to borrow.

Further cuts this year, even if smaller, will help ease the pressure on Americans’ wallets.

The Fed’s key interest rate does not directly affect mortgage rates, but the cost of home loans tends to fall along with interest rate cuts.

Mortgage rates have already begun to fall in recent months. The average 30-year fixed-rate mortgage is now 6.12 percent, according to the latest data from Freddie Mac as of Oct. 3.

Mortgage rates should continue their downward trend, providing a boost to those looking to refinance or buy a home.

Wall Street was concerned about early July jobs numbers that came in lower than expected, sparking fears that the U.S. was heading toward a recession.

As inflation continues to cool, the central bank has reiterated its mandate to ensure there is no drastic deterioration in the labor market either.

“A repeat of the 0.5 percent rate cut in September is ruled out as non-farm payrolls beat expectations,” Isaac Stell, investment manager at Wealth Club, said in a statement.

“Slower hiring and a rise in the unemployment rate worried rate makers last month, but there is no evidence of that in these numbers.”

This is breaking news. Updates to follow.