The Pet Rock is dead.

Fast-moving inflation and high interest rates, careening out of control, killed the Pet Rock and other silly gifts like it.

This Christmas will be the season for buying practical gifts, some local retailers say, like comforters, Cuisinarts and clothing.

"Clever, useless gift items," said the spokeswoman for Woodward & Lothrop, "their day seems to have past. The day of the Pet Rock is really no longer. "People aren't willing to spend $5 for something they can't use."

People have even returned to watches with big and little hands because they're easier to read the time that way than by pushing buttons and waiting for the time to appear in sometimes hard-to-decipher computer figures, said Des Karmolinski, vice president for marketing at W. H. Bell.

Ronco Teleproducts -- which has made unusual but absurdly practical gifts under its trademark -- will market, for example, Mr. Dentist, a device, complete with dentist's mirror, for lay people to clean their own teeth professionally at home. Another popular item, according to Jerry Epstein, Ronco senior vice president, is the battery tester for people to test all the batteries in their home. He even has a vacuum cleaner for phonograph records. Epstein insisted these are big sellers.

Some retailers are projecting only fair sales this season, mostly because of the receding national recession and unemployment (in this area, concentrated in the District). Christmas sales are important because many retailers make as much as half their profit during the two or three months before the holiday.

"Based on the general trend of business this year, people are more likely to be buying things that are more functional or that they've put off all year," said Judith Newman, divisional merchandise manager for the Design Store. "Rather than buy something that's rather superfluous, they'll buy something somebody needs."

Of course, there are always exceptions.

One of the Design Store's biggest sellers this year has been its goose lamp. No, not a goose-neck lamp but a two-feet-high, translucent lamp shaped like a goose.

"It has absolutely no function except to provide a little bit of light," Newman said. "That's been pretty popular, although it isn't very functional."

But Newman conceded it may have its practical side. "Maybe people buy them to cheer them up in this generally depressing world that we live in."

At the same time, one of the biggest blockbusters this Christmas season is expected to be the Atari Space Invaders electronic game that every day draws lines at the model at Woodward & Lothrop's downtown store, a spokeswoman said.

To play this game, which earlier invaded pinball arcades and then local bars, one needs a $159 computer system to hook up to the home television set. The company sells 38 cartridges for about $30 apiece for playing different games, including Space Invaders.

"It's a cult type of thing," the Woodies spokeswoman said. "You can't go anywhere where there's not a Space Invader machine.We expect to blow them right out of the store."

"Electronic games are still going to be very big," she said.

"The toy industry seems to be depression-proof," one national toy retailer explained.

Leonard Kolodny, manager of the retail bureau of the Greater Washington Board of Trade, echoed predictions of many local retailers that this Christmas buying season will be fair, partly because of the economy and partly because of uncertainty about the new Reagan administration.

"There's a great deal of uncertainty in the greater Washington area . . . will he make changes, abolish some agencies, create new agencies," meaning changing some employes' jobs, Kolodny said. Also affected will be the area's "major spinoff" businesses that contract with or sell goods to the government, Kolodny said. "They all have a feeling of 'We don't know what's going to happen until January or February.'"

Another factor is the weather, Kolodny said. When the weather isn't cold people don't warm up to the Christmas spirit, he said. "You can't sell fall clothing when it's hot outside," Kolodny explained. "If the weather is right the rest of the year we may pick ourselves up out of the doldrums."

Another factor affecting sales, he said, would be consumers' beliefs, left over from President Carter's anti-inflation credit control announcement last March, that charging goods is unpatriotic, Kolodny said.

Last year local retailers didn't predict a smashing Christmas either, but Kolodny said almost all retailers said the last four days of last year's season were "fantastic." Most retailers beat the previous year's sales, and a few indicated comparable results, Kolodny said.

Kolodny this year, however, disputes the assessment of some retailers that shoppers won't give up the silly items this season. "People do a lot of buying on the spur of the moment," he said. "People will buy what they can afford to buy. People who shop in expensive stores will continue to shop in expensive stores, and those who shop in less expensive stores will continue to shop in less expensive stores."

"The issue is what's affordable and how well the retailer does his merchandising," Kolodny said.

For example, one look at the I. Magnin Christmas catalogue supports Kolodny's philosophy. The company is promoting items such as $31,500 gold-and-diamond necklaces, $19,000 gold-and-jeweled chokers with matching $3,200 bracelets, $11,900 wristwatches and 18,500 fox fur coats.

Newman said that at the Design Store, a big seller is expected to be $250 pasta makers.

On the other hand, W. H. Bell will be selling a lot of less expensive gold chain jewelry, which Karmolinski said has been made lighter in weight so it can be cheaper in price. One of the biggest sellers will be pearls, he said. CAPTION: Illustration, no caption, by Charles Waller for The Washington Post; Picture, Michael A. Parker tries out Space Invaders game at downtown Woodies. The popular toy costs $159.99.By Douglas Chevalier, The Washington Post