WHEN DOES this region know that it is in a recession? For the unemployed National Bank of Washington teller, the laid-off Garfinckel's sales clerk or the out-of-work Fantle's drugstore manager, the answer comes easily: when your employer goes out of business, there is a family to support and work is hard to find. For them, recession is a depressing reality.

But the fate of their ex-employers tells us less about the state of our regional economy. Neither the National Bank of Washington's failure -- the first for a major District bank since the Great Depression -- nor the demise of the Fantle chain or Garfinckel's department stores can be chalked up to a recession. Those closings would have occurred without an economic downturn for reasons found within their operations. The NBW, Garfinckel's and Fantle losses, however, have clearly added to the region's woes, making matters a little worse than they would have been otherwise. So how bad is it?

The working definition of a recession -- two consecutive quarters of decline in the gross national product -- doesn't have a regional match. We know from such experts as Steve Fuller, chairman of George Washington University's department of urban planning and real estate development, that the area economy has been slowing for some time. Where the region produced 87,000 new jobs in 1988, job growth slipped to 63,000 last year; this year will likely show a net loss. Our distressed and overproduced real estate market, caused by bank financing of speculative excesses, has its own consequences: 14,000 fewer construction industry jobs, sharply lower new-home sales and high vacancy rates for commercial office buildings.

These problems, along with a general caution and retrenchment by businesses this year, have rippled throughout the region since the beginning of the year. Consumer anxiety is showing up in the form of less spending, and that, along with everything else, translates into a weakened area economy and sharply lower revenues from taxes and fees. Hence budget shortfalls in the District and in Maryland and Virginia jurisdictions and the calls for Draconian cuts in programs and services.

Yet there are signs -- early and tentative -- that our economic downturn could be shallow, short and nothing like the 1982 recession. The decline this time is not plagued with double-digit interest rates and high rates of inflation. October's regional unemployment at 3.5 percent is well under the national average in October of 5.9 percent and the 1982 regional level of 6.5 percent. Residential housing backlog, another key indicator, is down to 2 1/2 months, and prices are returning to more realistic levels. Should interest rates remain stable, an upturn in housing demand and new construction activity could be seen by next spring.

This area's cooling economy -- with a 1990 gross regional product of $122 billion -- remains fundamentally strong. It rests on a solid federal base and a now diversified private sector, and it ranks just behind New York as home to foreign missions and international organizations. The '80s marked the arrival of the Washington region as a major player in the national and international markets, and the growth forecast for the '90s is upbeat.

There are wild cards, of course. Capital to finance the expected recovery and future expansion could be scarce if the banks are too weak to perform their credit function. And there is still Saddam Hussein. But the lesson learned thus far is that while the area may not be recession-proof, it does have a great deal of economic staying power.