Jets W-League coach Craig Deans was disappointed with the result and some defensive errors but pleased with the improved performance in a 3-2 loss to Canberra United on Saturday.
Norwegian Elise Thorsnes scored the winner in the 80th minute in the round-three game at McDonald Jones Stadium, providing a cool one-on-one finish after running onto a counter-attacking long ball.
Newcastle had fought back from 2-0 down to be level at half-time after two late penalties converted by Tara Andrews.
Kaleigh Kurtz was penalised for a foul on Nicki Flannery on the corner of the 18-yard box in the 40th minute and Karly Roestbakken was judged to have fouled Jenna Kingsley at the top of the area in the 45th.
Canberra, who were without former Jets striker Katie Stengel because of an ankle injury, had built a deserved lead before the dot shots.
Ashlie Crofts, making her starting debut, tapped in a rebound for 1-0 in the 29th minute after Roestbakken's long-range shot hit the crossbar.
American speedster Simone Charley, who had been close twice with shots, made it 2-0 in the 32nd minute when she slotted past keeper Claire Coelho after Leena Khamis' ball put her in behind the Newcastle defence.
Newcastle were left to rue missed chances, especially from Flannery, who was wide of goal in the 31st, 33rd, 66th and 72nd minutes against her former club.
Deans said the attacking misses and defensive errors, especially with positioning at turnovers, proved costly.
"They had a lot of shots from strange areas but Nicki Flannery had three or four good chances she didn't take," said Deans, who has a squad built on local talent this season.
"If she had, it might have been a different story, but I thought a draw would have been a fair result.
"They had some individuals who did things to win them the game, but we made some bad mistakes for the goals as well. We didn't defend very well."
The Jets' performance, though, was encouraging for Deans following their 1-0 loss to Western Sydney Wanderers a week earlier. Newcastle opened the season with an encouraging 1-1 draw against a star-studded Melbourne City.
"The performance was definitely better than the week before and I think that's the important thing for us," he said.
"If we have a poor performance, we have to make sure we don't have two in a row, which we didn't.
"We thought we could win that game and it was a good chance for us to get into the top four, so we're disappointed we didn't.
"We're disappointed but we know we're getting better and hopefully by the end of the season everyone will be much more clinical and much more composed.
"We're still a bit panicky in possession and our pass completion rate is always 10-15 per cent below the other teams, which is probably an indication of their lack of experience at this level, but we'll get there."
The Jets are away to Perth on Saturday night.