what was the economy like in the 1940s?

Answer 1

That's mixed. Everything went into the war effort - world war 2. It brought us out of the Depression of the 30's.

So given you take millions of youth out of the labour force to join the military, AND production was at an all time high producing war goods. That meant there were jobs for everyone, including a higher acceptance of females as factory workers. But there were shortages on everything so nothing to spend that money on.

The war ended in 1945, and the production quickly switched back to consumer goods. Tanks and jeep factories now produced cars and trucks. So the post war economy was a good feeling and people buying consumer goods they could never have before.

Answer 2

As said above, the economy was pushed to the limit in the war years. Afterward there was actually a nasty recession though, but it cleared up in a year or so.

In a sense the wartime economy was terrible. The only purpose of an economy is to provide goods and services to satisfy the needs of consumers. During WWII the economy badly failed to do this, since so many resources were diverted to the war effort, and the rationing and deprivation of very basic staples was just incomprehensible by today's standards.

In another sense the economy was booming like never before, though. When we complain about slow growth or unemployment, we refer to the fact that the economy has more supply than demand, and we worry that resources (including people) will not be fully utilized. But WWII was just the opposite, everything was balls to the wall trying to keep up with wartime demand.