Demand
During the 1920s, the United States was furiously producing products from automobiles to radios that were being purchased largely on credit. By 1929, the markets were saturated with such products and demand began to fall. Because of the runs on banks and the frantic sell-off of stocks, credit became hard to get even for those wanting a new car. Once there was a major backlog of products no one was buying, there was little money coming into the companies that made the products. This resulted in massive layoffs of workers throughout the country. Without income--and there was no unemployment insurance before Franklin Delano Roosevelt's New Deal in the 1930s--people began to lose their homes and had little money to buy anything other than food. Demand for products and services dried up, which led to even more unemployment.
Unemployment
Because no one had any money to buy products, the people who built the products were out of work. They also had little money to buy anything, and the spiral continued. Social programs were not government-run at the time, so there were few places to turn to for help other than religious and other charities. They, too, were strained by the sheer numbers of people turning up for bread and soup. The companies had no money coming in, so many of them folded. Those that remained had few workers. By 1933, nearly 25 percent of the workforce was unemployed.
