* S/adj adjusted rate at 4 pct, highest since May, 1998
* Unadjusted rate at 3.8 pct, highest since Jan, 2006
* Jobless rate seen rising well into 2010 (Adds Manpower survey)
ZURICH, Sept 8 (Reuters) - The deep recession pushed Switzerland's unemployment rate to its highest level in more than a decade in August, sending a staunch reminder the economy may face a bumpy road to recovery.
Unemployment rose to 4.0 percent when adjusted for seasonal swings from 3.9 percent in June, the State Secretariat for Economic Affairs (SECO) said on Tuesday.
This was the highest since May 1998 and in line with
economists' expectations in a Reuters survey.
The unadjusted rate also ticked up to 3.8 percent in August, with the total number of jobless rising to 150,831. At the same time, the number of vacancies fell to 13,353.
"The figures were more or less as expected. The business cycle is quite good in Switzerland but the labour market is lagging this good cycle," said ZKB economist David Marmet.
"Until summer 2010 we will see an increase in the rate up to maybe 5 percent. From summer 2010, the jobless rate will decrease and it is possible that 5 percent is the top."
A survey by staffing firm Manpower published on Tuesday showed that 10 percent of Swiss employers expect to cut staff, while 7 percent expect to hire, with the employment indicator at minus 3 points, its lowest since the survey began in 2005.
Employers in the banking, insurance, property and service sector were the most optimistic about hiring, while those in the hotel sector were the most negative, the survey showed.
Signs have been mounting over recent weeks the economy may be about to move out of its worst recession in decades.
The closely-watched KOF indicator, the country's leading growth barometer, posted the strongest monthly jump ever in August, signalling the recession was close to an end. [ID:nLS708368]
But Swiss National Bank board member Thomas Jordan warned two weeks ago the recovery could take time and the unemployment rate may rise to a nearly 6 percent next year -- a post-war record.
However analysts expect the SNB to hold rates steady at its quarterly meeting on Sept. 17.
The SNB has taken drastic steps to try to revive the economy and fight deflation risks, including cutting its target for the 3-month franc LIBOR to 0.25 percent and intervening to keep the Swiss franc from rising.
After the Swiss economy slipped into recession in mid-2008, the SNB sees a decline of between 2.5 and 3 percent this year and only expects a return to growth in the middle of 2010.
Sarasin economist Ursina Kubli said the higher jobless rate was as expected and does not predict any substantive action from the SNB next week.
"We don't expect any big steps from the SNB this month apart from raising their growth forecast," she said. (Reporting by Emma Thomasson and Katie Reid; editing by Ron Askew)