Interpreting measures of economic activity in the Washington area these days is a bit like trying to differentiate between shades of gray.

Grant Thornton, the big Chicago-based accounting and management consulting firm, recently noted that the pace of the economy in metropolitan Washington had "slackened" in the second quarter. The Washington Times, noting that Washington dropped 0.72 points on the Grant Thornton index of economic activity in the quarter, concluded that the local economy had "weakened." The Baltimore Sun, citing the Grant Thornton index, reported that the economies of both Washington and Baltimore "sagged" in the spring. Still, Grant Thornton's economic index for 24 metropolitan areas shows that it increased 0.86 points in the Washington area for the 12-month period that ended in June.

More shades of gray. Oscar A. Ornati, a professor at New York University's Leonard N. Stern School of Business, reports the school's labor market indicator shows that Washington's employment climate has worsened slightly. "In spite of the {second} quarter's decline," according to Ornati, "Washington's labor market is still ranked the second highest of any of the 10 cities in the {Stern} study." Unemployment in the area is only 3.2 percent.

Nevertheless, the Washington area is creating new jobs at an even slower pace (1 percent on an annual basis) than the sluggish U.S. economy (2 percent), according to the D.C. Department of Employment Services. On the other hand, Ornati says, the Washington story is two-pronged: "It highlights the slowing down of its growth ... while showcasing the District as the city in which unemployment is still the among the lowest in the nation."

That's unlikely to change the mood of gloom-and-doom that appears to be spreading, however. Even the shades of gray may be eclipsed by that mood.

Unquestionably the Washington area is in the midst of a slowdown. A weak national economy tends to make it seem worse. Beyond that, however, the area is in the throes of an anxiety crisis. A collective psychology that emerged in the wake of the slowdown tends to make matters worse than they really are.

There is no getting around the fact that the economy in metropolitan Washington isn't growing as fast it was a year ago. In fact, it hasn't been growing very much for at least two years. Not only has job creation been declining since 1987 but population growth also is down. That's obviously why a serious labor shortage began to develop at least three years ago.

How quickly we forget. Ten years ago, almost no one in the Washington area would have expected to see 104,000 jobs added to the local economy, as they were in 1984. Real estate has been a mainstay in the area's economy for years but overbuilding the office market by 30 million square feet in 1980 would have been considered absurd. Today it's a reality.

It's that kind of growth and go-go mentality that helped produced such an explosive spurt of economic activity here in the 1980s. The area's economy, as a result, grew at an incredible rate of 5 percent to 6 percent annually at the height of expansion in the 1980s. That's at least twice what is considered outstanding growth for this area. But business and consumers came to expect that the 1980s boom would last well into the next century.

It didn't, of course. How could it? Job growth in the area exceeded 80,000 annually for five consecutive years. In the best of times before that, the annual average was only about 60,000. With the building boom in high gear, national real estate observers were calling metropolitan Washington one of the country's hottest real estate markets. Just two years ago, it was ranked second only to New York. Land speculators stampeded forests and farms. Builders and homeowners reaped outrageously high returns from an inflated residential market. In the meantime, national retailers, spurred by the drumbeat of statistics about the area's wealth and spending power, joined shopping center developers and consumers to make this a hotbed of retail activity.

So obsessed were people with wealth and growth that they scarcely noticed signs that warned at least two years ago of a slowdown.

Now the office market is overbuilt and developers are desperately fending off anxious lenders who helped fuel the space glut. Job growth is down to an annual rate of 21,000. Fewer people are settling in the area and the labor shortage is getting worse. Expansion plans are being delayed, expenses are being trimmed and margins are thinner. Those are natural responses to a slowdown but aren't yet evidence that the area's economy has gone from boom to bust.

Further weakening in the national economy, escalation of the Persian Gulf crisis, a breakdown in budget talks, or a combination of the three certainly could create serious problems in the local economy. A lengthy furlough of federal employees, for example, could severely damage the economy here. Many of the problems affecting the national economy already are having an effect locally. Consumer confidence, for example, is a major concern to retailers nationally.

Ten years ago, the true believers were convinced that the Washington-area economy was recession-proof. The fallout from the 1982 recession forced them to modify that claim, so now the local economy is said to be recession-resistant. The presence of the federal government as a big spender -- cuts in total spending notwithstanding -- and the private sector's diversity, thanks to the 1980s boom, lend credence to the claim that the area is recession-resistant. They obviously give this area greater economic staying power than most regions can claim.

When the year began, economists forecast slower growth for the Washington region through the mid-1990s. Slower than the unusually high growth of the 1980s is what they meant, of course.