They have now lost three Premier League games in a row, having been on an unbeaten 10-match run before Christmas.
Hughton, though, remained positive despite a second home loss in a week, after Chelsea ran out 1-0 winners in Norfolk on Boxing Day.
"Manchester City showed why they spend the amount of money they do for the offensive players they have, but you cant be 2-0 down so early on and expect to have a good day," Hughton said.
"However, we displayed great character and certainly at 4-3 it seemed it might be going our way, but again they showed real good quality.
"I cannot fault the endeavour of the players we have got, so now we will look to go again."