Mount Carmel lost 270 jobs in 2003 to the closing of a Snap-on Tools factory that had been in operation since 1937. However, the town has an unemployment rate of just 4.6%, as of May 2006 . The situation has substantially improved since 1992, when the unemployment rate peaked as high as 15.1% . However, the town incured another significant loss. On April 5, 2007, Foundation Coal Holdings, Inc., of Linthicum Heights, Maryland, announced plans to close the Wabash Mine in nearby Keensburg, Illinois, meaning a loss of nearly 230 jobs in Wabash County.
Duke Energy's Gibson Generating Station is the nearest employer of substantial size. The Gibson County, Indiana power plant is located less than a mile away from Mount Carmel, directly across the river. It is the third largest coal power plant in the world , and the ninth largest power plant in the United States . Its pollution has prompted considerable debate, partially because of repeated incidents where the plant created a blue toxic cloud after adding new emissions control systems. The city was featured in Ripley's Believe It or Not! for its once multi-colored bridge over the Wabash, painted white and black on the Illinois and Indiana sides of the state line, respectively. The bridge, now green, connects Princeton, Indiana to Mount Carmel via Indiana State Road 64 and Illinois Route 15.  Illinois Route 1 and Illinois Route 15 meet just a few blocks from the bridge. One rail bridge runs parallel to the IN-64/IL-15 bridge, and another sits just a few miles south, near the southern most edge of the city. There are plans to build a new bridge while Indiana prepares to expand Indiana 64 to a four-lane highway as part of their Major Moves Project

Additional nearby employers include Indiana's Toyota factory, producing the Tundra pickup truck line, and a Champion Laboratories plant in Albion, Illinois that produces air and fuel filters. Local employers include several oil & gas firms, exploiting the Southern Indiana Oil Basin, which extends into Illinois, Indiana, and Kentucky, which once had reserves of over four billion barrels of crude oil.

Mount Carmel is within the Wabash Valley seismic zone. On April 18, 2008 at 09:36:56 UTC (04:36:56 Central) an earthquake of 5.2 magnitude was centred near the city ,and just hours later an aftershock of 4.2 magnitude shook Mt. Carmel and its residences. It was felt widespread across southern Illinois and eastern portions of Missouri including St. Louis, 123 miles away