Nico O'Reilly scored both City goals in the first half either side of Lewis Hall’s deflected strike for Newcastle.
Speaking after the game, Howe said: "Considering everything we have put into the last few weeks, that was a good performance.
"It wasn't good enough but we went toe to toe with them. We were equals in the game, we were well in it. Didn't defend the two goals well enough, that's the disappointment really."
Howe said: "We were in it right until the end with Harvey (Barnes') shot right until the end. We were chasing the game against a very good team. We did that to a man excellently all game.
"The end product, the last cross, the last finish was not quite there. There were several occasions where we should have done better.
"We've returned to a good way of playing, our way of playing. We have done that over the last four games and as long as we get that consistently I'll be happy."