Wages rose little compared to the large increases in productivity and corporate profits. Economic success was not shared by all, rich Americans kept most of all income. If demand for their products denied, bussiness laid of workers and contributed to a downward spiral in demand.
Installment buying and increased borrowing were caused by low interest rates and consumer and business belief that economic boom was permanent. Over-indebtedness resulted in bank failures and defaults of loans.
Business growth overproduced good that workers with stagnant wages could not continue to purchase
Weak farm economy
The prosperity of the 1920s never reached farmers who had suffered from overproduction, high debt and low prices so in the depression severe weather and droughts added to farmer's difficulties
The government did little to protect businesses and congress enacted high tariffs which protected US industries but hurt farmers and international trade. More bank failures occurred because people panicked to get their money out of banks without depositor's insurance.
US insistence on loan repayment in full and high tariffs policies weakened Europe and contributed to the worldwide depression.