How did World War I effect the economy of the United States?

When the war began, the U. S. economy was in recession ... Entry into the war in 1917 unleashed massive U. S. federal spending which shifted national production from civilian to war goods. Between 1914 and 1918, some 3 million people were added to the military and half a million to the government.

The war ended on November 11, 1918, and America's economic boom quickly faded. Factories began to ramp down production lines in the summer of 1918, leading to job losses and fewer opportunities for returning soldiers. This led to a short recession in 1918-19, followed by a stronger one in 1920-21.