Leading at halftime through Joao Pedro, Chelsea lost at home 2-1 thanks to Ollie Watkins' brace.
"We dominated 60, 65 minutes of the game," said James afterwards.
"We came out sharp with the way we set up. We got off on the front foot and in the right way. In the first 60 minutes of the game they didn’t create any chances, and then they get one and the dynamic changes.
"We knew they’d make substitutions and the shape changed slightly but it was nothing we shouldn’t have been able to deal with. We understand the style and the way they want to play. We have ourselves to blame.
"Second half one or two moments changed the game. They picked up momentum. It was two slight errors from us and we got punished. This is why it’s the toughest league in the world. It’s always disappointing to lose at home."
He added, "Many teams have spells in the season when they’re underperforming. We have to keep chipping away game by game. We are fighting every day, we want to get better.
"We have to put this game behind this and look forward because we have another game in a few days which we have to prepare right for, come back and win."