By Harriet Torry

WASHINGTON -- Americans' overall sense of financial health improved modestly last year, but adults without any college education lost ground for the first time since 2013, according to a new Federal Reserve survey.

Some 70% of respondents polled in October 2016 said they were either "living comfortably" or "doing okay," up from 69% the year before, and 62% when the question was first posed in 2013, the Fed found in its latest Survey of Household Economics and Decisionmaking, released Friday.

Yet the share of respondents with no more than a high-school diploma who said they were "living comfortably" or "doing okay" declined last year to 60% from 61% in 2015.

"Many American households are struggling financially," Fed governor Lael Brainard said in a statement.

Education levels played a large role in determining respondents' self-reported financial well being. The survey found 82% of adults with a bachelor's degree or more in education said last year they were "living comfortably" or "doing okay," up from 80% the year before, as well as 69% of those with some college or an associate degree, up from 66%.

Americans' sense of economic health also varied among racial and ethnic groups. Of the respondents with no more than a high-school diploma, a greater portion of non-Hispanic whites -- 20.5%-- reported being worse off than a year before than did non-Hispanic blacks, at 18.6%, or Hispanics, at 20.2%.

Overall, most of the changes reported in the survey were relatively modest, reflecting a slowly improving economy and an unemployment level at or below 5% throughout 2016.

Day-to-day finances are still precarious for many Americans. The survey found 44% of respondents said they wouldn't be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it.

In another sign of the educational divide, 79% of those with at least a bachelor's degree said they would still be able to pay all of their other bills in full if hit with a $400 charge. Just 52% of those with no more than a high school diploma said the same.

"Everybody on the low end feels like they're in a different situation, almost like they're in a different America than those with a bachelor's or more," said Jonathan Morduch, a New York University professor of public policy and an economist.

"The combination of instability and illiquidity are really hurting at the low end," he added.

Still, the overall share of adults who would struggle to come up with $400 in a pinch has declined by 6 percentage pointssince 2013, indicating Americans' financial situation is slowing getting better. While 25% of respondents reported skipping medical treatments due to cost in 2016, that was down 7 percentage points since 2013.

Out-of-pocket medical expenses are one of households' biggest financial headaches. Of those who reported a major unexpected medical expense over the past year, the median out-of-pocket cost was $1,000. According to the report, some 24 million adults are in debt from medical expenses incurred over the previous year.

Many respondents also reported that they lack retirement savings, with 28% of adults who haven't retired yet indicating they had no retirement savings or pension whatsoever. That is down from 31% in 2015.

The survey, conducted in October 2016, drew 6,643 respondents. It was started in 2013 as part of the central bank's effort to monitor America's recovery from the 2007-2009 recession and identify risks to households' financial stability.

Write to Harriet Torry at harriet.torry@wsj.com

(END) Dow Jones Newswires

May 19, 2017 16:59 ET (20:59 GMT)

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