Wenger: Arsenal 'just not good enough'
The Frenchman admitted the Gunners got what they deserved.
"We were not sharp enough in the first half, and our passing was certainly not as good as we expect it to be. I don't know why," he said.
"You have to give credit to Fulham; they played very well and they started sharper than us.
"We dominated the second half, but I felt in the last 25 minutes we were too nervous and wanted to just hit the ball up there rather than create a chance.
"Of course it is a setback. But the result is there, and we have to make up for it by winning the next match. We have a big game on Wednesday in the Champions League and need to improve.
"We paid a big price for the mistake on their goal. We should be able to cope with a corner when it comes in at low level like that."
He said: "You are right. That is a fact - but we have to face it because from all our possession we could not produce many chances. Frankly, the performance was just not good enough."