The local economy continues to rebound from a lousy winter, two economic reports indicated today, but employment remains weak.

The Chicago Business Barometer, an index of local business activity, increased another 2.5 points to 65.5 in May after jumping 7.1 points in April. Anything over 50 indicates the economy is growing, and that's the highest level the index has reached since October and nearly as high as it's been for the past decade.

Similarly, the Federal Reserve Bank's Midwest Economy Index, a weighted average of 129 state and regional indicators, moved into positive territory in April at, 0.12 from -0.04 in March. The Fed's index shows how much the economy is performing above or below historical growth rates in five Midwest states: Illinois, Indiana, Iowa, Michigan and Wisconsin.

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A surge in Illinois manufacturing was one of the strongest contributors to the rise in the index, up 0.06. Consumer businesses were up 0.05 as well, but the state's construction and services sector performed at a below average pace.

But it's a jobless recovery. Even though the state's unemployment rate is coming down, Illinois still has the third worst rate in the nation. Employment was down 3.2 points to 54.6 in the Chicago Business Barometer despite a three-year high in order backlogs and increases in new orders, inventories and a spike in the price of raw materials and components.

“You can't have employment at 54.6 if you're going to keep up with demand,” said Alyce Andres-Frantz, Chicago Bureau Chief for Market News International and author of the Chicago Business Barometer. The increased use of temporary workers and interns “doesn't seem to be going away.”

Only about half of the Chicago-area companies in her survey have plans to hire in the next three months, and only half of those plan to hire permanent workers. “It's telling me companies are trying to do more with less,” she said.