The Reds were on level terms after Dirk Kuyt cancelled out Kevin Nolan's opener, but they conceded a sloppy second when Martin Skrtel failed to clear on the edge of the penalty area. Hodgson felt Liverpool had played well up until that point, but he was clearly angry with his players after Andy Carroll's late 25-yard drive sealed victory for the Magpies.
"This is a major setback and a major blow because we have been on a good run recently and played well," said Hodgson. I thought we played well in the first half - we had most of the ball, asked a lot of questions of their back four and got into some good positions.
"I had high hopes we would continue to play well but I was disappointed with our second-half display. We let Newcastle back into the game and we conceded a second goal - the like of which you don't want to see as a manager. The ball should have been cleared on at least three occasions before Barton scored."
Hodgson continued to rate highly Liverpool's first half performance, despite the fact they ended the opening 45 minutes 1-0 down after registering just two shots on target.
"Today we didn't produce a good enough performance to win the game. If you want to win a game away from home against a team like Newcastle you have to play at least as well as we did in the first half for the full 90 minutes.
"We didn't do that in the second half. We gave the ball away far too often and we kept giving the ball away. We didn't get anywhere near as good enough quality balls into their half like we did in the first half, and we gave away two very bad goals."