Economic Indicator Up .2% in September : Growth: Consumer expectations were the major cause for the index’s second consecutive monthly advance.

The government’s chief economic forecasting gauge inched ahead 0.2% in September for its second consecutive monthly advance, the Commerce Department said today, indicating continued but slow growth in the months ahead.

The increase in the index of leading indicators, designed to foretell economic activity six to nine months into the future, followed an advance of 0.5% in August that was revised upward from a 0.3% gain reported earlier.

The often-volatile index was unchanged in July and had dipped 0.1% in June. The July figure also was revised, down from the 0.1% increase originally reported.

Analysts said that while the index indicates continued but slow growth, the immediate future will be a precarious time.

“The economy looks very soft right now,” said Bruce Steinberg, senior economist for Merrill Lynch Capital Markets in New York. The next few months “will be a period of vulnerability,” he added.

Four of the 11 forward-looking business statistics that make up the composite index contributed to the September gain.

The index measuring consumer expectations was the largest positive contributor last month and the major cause for the August and July revisions, the Commerce Department said.

Other positive factors were an increase in the money supply, a longer average workweek and higher stock prices.

The other statistics pointed down, led by a decrease in manufacturers’ new orders for consumer goods. That was followed by a decrease in manufacturers’ unfilled orders; fewer orders for plants and equipment; faster vendor performance, meaning declining demand; higher initial unemployment claims; fewer building permits, and lower prices for sensitive materials, indicating weakening demand.

The economy has been slowing since the Federal Reserve applied the brakes last year to dampen inflation. But while inflation appears to be abating, analysts are concerned that the Fed’s grip could thrust the economy into recession.

Steinberg and other economists point to excessive inventories and slackening durable-goods orders, including a weaker demand for new automobiles, as major threats to the economy because both could trigger growing unemployment and stagnant growth.

Other areas of concern include the nation’s trade deficit, which increased in August after falling for two straight months, and declining corporate profits, which could affect stock market prices.

Steinberg and Lawrence Chimerine, senior economic adviser for the WEFA Group in Bala Cynwyd, Pa., both noted the consumer confidence category as a major positive indicator in the September index.

Consumer spending, which accounts for two-thirds of the nation’s economic activity, accounted for much of the year’s growth so far.

“As long as confidence holds up, we probably won’t have a recession,” Chimerine said.