El Paso wrapped up 2025 with an economy that looks solid from a distance but more uneven up close. The metro logged modest job gains alongside a small rise in unemployment, while housing and other living costs stayed well below national averages. At the same time, wages are largely stuck in place and the job market is heavily anchored by government and military work, a mix that could leave El Paso recovering more slowly than many of its peers.
Unemployment edges up, wages slip
According to the Federal Reserve Bank of Dallas, El Paso’s unemployment rate ticked up to about 4.6 percent in November, while average hourly earnings dipped to roughly $22.82, a 0.4 percent decline from a year earlier. That pairing of higher joblessness and slightly lower pay is one of the clearest signs that the local labor market is losing steam. Sales tax receipts offered a brighter spot in the fall, jumping sharply from month to month, but that strength has been choppy rather than consistent.
Government jobs keep El Paso afloat and exposed
Data from the Bureau of Labor Statistics show government work is a cornerstone of the local economy, with roughly 72,800 positions in the metro area, or about one fifth of covered jobs. That share sits well above the level in many comparable cities. The footprint grows even larger once Fort Bliss is factored in. The Texas Comptroller estimates the base supported about 127,000 total jobs and contributed roughly $27.9 billion to the state economy in 2023. Those public sector and military ties soften the blow during downturns but also leave El Paso particularly vulnerable when government budgets are on the chopping block.
Affordability masks underlying weakness
Cost of living comparisons continue to be one of El Paso’s main selling points. Housing costs often run 30 percent or more below typical U.S. levels, according to RentCafe using C2ER data. That gap keeps day to day expenses more manageable for many households. Yet the same affordability can hide slower wage growth and a job market that trails regional competitors such as Albuquerque and Tucson. Lower prices help, but they do not fully make up for paychecks that are not keeping pace.
What reporters and local analysts are warning
As the El Paso Herald Post has reported, the main risks heading into 2026 center on continued stagnation in jobs and wages, along with the prospect of tighter budgets at the local, state, and federal levels and softer consumer spending. The Herald Post also flags a more hopeful scenario in which prices for everyday goods stabilize and government spending ticks higher, a combination that could meaningfully lift the local outlook.
What to watch in 2026
In the coming year, local officials and residents alike will be watching a familiar set of indicators: the unemployment rate, monthly earnings reports, sales tax collections, and hiring trends at Fort Bliss and area school districts. Together, those numbers will help tell the story of whether El Paso’s affordability turns into lasting growth or whether the metro continues to drift behind its regional rivals.
