The economy of USA was strong in the early 1920s because of the following reasons:
(1) Mass production became a characteristic feature of industrial production in the USA. It lowered costs and prices of engineering goods.
(2) There was a rise in the purchase of luxury consumer goods like refrigerators, washing machines, radios, gramophones, players etc. on credit repaid in weekly or monthly instalments.
(3) The demand for consumer goods was further fueled by boom in house construction and home ownership, financed once again by loans. It created the basis of prosperity in the US. It was true that roots of great depression lay in this boom because in every sector goods began to be over produced to such an extent that there was a steep fall in the prices and demand. Markets were flooded with unsold goods as purchasing power reduced.
