Beware of Friday's jobs report - the numbers may be way off

It's hold-your-breath time once again. The July employment numbers come out Friday morning at 5:30 - in particular the number of jobs added during the month - and the political and financial stakes are enormous. This is always an important moment on the economic calendar, but the data will be getting a lot more attention because of the November election, and how it reflects the overall employment picture. Except there's a problem: The numbers might not be all that reliable. See, July is when the government makes the largest adjustments to its job figures in order to account for fluctuations like auto plants being shut down or teachers going on summer break. There's nothing nefarious about these so-called seasonal adjustments - it's an important consideration in determining the health of the economy. But when the adjustments are so large they run the risk of distorting the bottom-line results. From NYT reporter Binyamin Applebaum:

Last year, for example, the [Bureau of Labor Statistics] estimated that payrolls declined by 1.3 million jobs in July, but it reported a seasonally adjusted increase of 96,000 jobs. That places a huge premium on the accuracy of the adjustment: A 5 percent error in the adjustment would have shifted the reported total last July by two-thirds. And even in the best of times, the bureau's estimates are rarely that accurate. The government has estimated an average change of 149,700 jobs in the last 10 July jobs reports, but it has since revised those estimates by an average of 92,900 jobs per year. In other words, the initial estimate is generally off by about 62 percent. In three of those 10 years -- 2002, 2003 and 2007 -- the agency wasn't even correct about whether the economy gained or lost jobs.

Bottom line is that a lot of attitudes are going to be influenced by numbers that might not be anywhere close to accurate. Keep that in mind when the know-it-alls start analyzing Friday morning.

Chart: CNNMoney