Jobs report surprises Wall Street - here's what it means for your 401(K), loans and mortgage

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

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

This is much higher than job growth in August, which was 159,000, and blew economists' expectations for a 140,000-job gain out of the water. 

The unemployment rate also dropped to 4.1 percent, despite forecasts it would hold steady at 4.2 percent.

Stocks jumped following the blockbuster report, which provided Wall Street with further reassurance that the labor market is on solid ground. Rallying stocks are good news for Americans' 401(K) balances, which tend to be invested in the major indices.

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

The premarket advances marked a significant turn for Wall Street after mounting geopolitical tensions had made for a rocky start to October. 

The report also revised job growth figures from August and July. It added 17,000 to August's total, bringing it to 159,000, and added 55,000 jobs to July's total, upping the monthly growth to 144,000. 

These upward revisions should ease concerns about the state of the labor market and likely locks in the Federal Reserve to a more gradual pace of interest rate reductions following its bumper cut last month.

The September rate cut brought interest rates down to between 4.75 percent and 5 percent, making borrowing less expensive for consumers.

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

Rates for credit card and personal loans should decrease, providing some respite for borrowers. 

But how much credit card lenders will cut rates by is unknown. APRs are set by banks, so any decrease will depend on the bank and the type of card.

The Fed's benchmark interest rate does not directly affect mortgage rates, but home loan costs tend to dip alongside rate cuts.

Mortgage rates had begun to fall in recent months, providing a boost for those looking to refinance or buy a home. 

But the average 30-year fixed rate mortgage ticked up slightly to 6.12 percent, as of latest Freddie Mac data from October 3.

This uptick mirrors a rise in US Treasury yields - which also jumped following the release of September's jobs report.

'Although mortgage rates have relented substantially, they bounced back somewhat this week as investors and the Fed disagree somewhat on the likely course for near-term policy,' said Realtor.com Chief Economist Danielle Hale in a statement.

'I expect to see markets shift closer to the Fed's forecast in light of today's data. This could put modest upward pressure on interest rates, including mortgage rates.'

She added that the drop-to-date in mortgage rates has boosted buying power substantially from recent lows, but many consumers still appear to be waiting for more. 

'The housing market is now in the seasonally slower period that offers advantages to flexible buyers, but is marked by a slow-down in demand. 

'As falling mortgage rates chisel away at the bind that locked-in homeowners feel, they could usher in an uptick in both supply and demand, as many unlocked homeowner sellers are likely to choose to buy a new home.'

Wall Street was spooked by the initial jobs figures for July, which were lower than expected, and sparked fears that the US was heading into a recession. 

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

'A repeat of September's 0.5 percent rate cut is off the cards as non-farm payrolls blew past all expectations,' said Isaac Stell, Investment Manager at Wealth Club, said in a statement.

'Softer hiring and a rise in the jobless rate worried rate setters last month, there's no sign of that in these numbers.'

While one report does not necessarily give investors the 'all-clear' sign, eToro US Investment Analyst, Bret Kenwell, said, it is a huge step in the right direction and the September jobs report was certainly a statement. 

'While the jobs market is still a concern, this was the top risk for the economy - and one that was taken down a few pegs after this report,' he said.

'Now investors can focus on some of the positives, like a dovish Fed, strong earnings and a broadening stock rally. 

'Provided these pillars remain in place, investors may view any notable dips in the market as an opportunity into year-end, particularly as we navigate through earnings season and the US election.'