Prosperity, Consumption, and Growth

Despite the turbulence of the immediate postwar period and the persistence of underlying social and racial tensions, the 1920s were a time of vigorous economic growth and urbanization. Between 1922 and 1927, the economy grew by 7 percent a year. Unemployment rates remained low, as producers added new workers in an effort to keep up with increasing consumer demand. Aligning themselves with big business, government officials took an active role in stimulating industrial and economic growth. Although the average purchasing power of wage earners soared, this economic boom left out many Americans from sharing in prosperity.