Christmas holiday retail sales in metropolitan Washington were the second-poorest on record in terms of growth from the previous year, while business at all area stores for the full year was at the weakest level since the recession year of 1974, as widespread talk of government reductions in force apparently dampened consumer buying.

Area retail business in December rose just 1 1/2 percent from 1980 levels and lagged nationwide retail sales gains of 5.1 percent during the month, according to a new Commerce Department report. Statewide figures also showed a decline in the month of 2.1 percent in Maryland and an increase of 3.8 percent in Virginia.

Moreover, retailers interviewed yesterday said sales remain slow, although business picked up somewhat in February and the early days of March after a disastrous January.

Retail trade in the District was hit the hardest, according to Leonard Kolodny of the Greater Washington Board of Trade. "It's depressed in the District . . . probably the worst I've ever seen," said Kolodny, who heads the business group's retail bureau and who has been gathering area sales figures on a regular basis for 18 years.

In the suburbs, he added, retail sales activity in recent weeks has been spotty but better than in the city--where federal and city government layoffs have been most concentrated and where area unemployment is the highest.

According to the Commerce Department, areawide retail sales in December were up 1 1/2 percent to $1.66 billion from $1.64 billion a year earlier. Consumer prices here rose about 8 percent over the same period, which means that retail volume failed to keep pace with inflation. Many stores cut prices sharply in promotional sales over the holidays, however, to clear out merchandise.

It was the slowest holiday season sales gain in the D.C. area since December 1974, when volume rose one percent from 1973. As a group, the area's 115 department stores fared better than other retailers with sales last December of $281 million, up 8.2 percent from the same month in 1980. In downtown Washington, department store sales in December rose 1.8 percent to $15 million.

Edwin K. Hoffman, chairman of the Woodward & Lothrop department stores, said yesterday that 1981 results for his company won't be available until late this month. But, he noted, initial planning last September and October for this year's spring sales season had expected gains in a range of 9 percent to 11 percent over last year.

"But then everything seemed to go bad, and we did the plans all over again, projecting gains of 3 percent to 4 percent . . . there are so many things wrong with the economy, we're not going to change our plan and we remain very conservative," although Woodies' sales in February were "sensational" and are "pretty good" in March after a January when winter weather and the Air Florida crash had an adverse impact, Hoffman said.

For the full year, retail sales here totaled a record $16.7 billion, an increase of 7.6 percent from $15.5 billion in 1980. Not only was the year-to-year gain lower than the rate of consumer price inflation but it also was lower than the 9.2 percent nationwide gain for the year and was the slowest rate of growth since a 2 percent increase in 1974.