WASHINGTON -- New orders for U.S. manufactured goods fell in January, led by steep drops in aircraft and ship orders, government data released Wednesday showed.

Factory orders fell 2.0% from December, the Commerce Department reported, slightly less than analysts expected.

The department revised downward the December increase to 1.3% from its initial 1.8% estimate.

Excluding transportation equipment orders, which tend to be volatile month-over-month, factory orders rose 1.3% in January.

Orders for ships and boats plunged 74.3%, while defense aircraft orders dropped 63.8%.

Nondefense aircraft orders also posted a hefty decline of 34%.

The backlog of unfilled orders slipped 0.2%, after a December increase of 0.7%, but were up 1.5% from a year ago.

Total factory orders increased 1.2% from January 2012, showing a continuing but slow momentum in the manufacturing industry.

"Unfilled orders remain on an upward trend. Continued growth in these orders will be necessary if manufacturers are going to keep production levels steady amid fluctuating demand," Briefing.com said in a research note.

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