Jordan Rhodes claimed the winner on 58 minutes when he touched the ball over the line, although it was initially awarded as an own goal when Aaron Cresswell's clearance ricocheted in off Town goalkeeper Stephen Henderson.
"I thought second half we were the better team until they scored, and goals change games and performances," McCarthy said.
"To concede the way we did was pretty galling. From a corner kick, we didn't mark properly and Hendo gets an own goal.
"We had to throw caution to the wind and I thought we had good chances towards the end to get something.
"I was pleased overall with our performance, to be honest with you. I can't ask for any more effort, it's just when you get the chances to put one away.
"I've said all along since I walked in that it'll go right to the end. It'll take 50 points to stay in the league and everybody's scrapping for them.
"We've had our good run or we wouldn't be above the bottom three. It's a matter of starting again next Saturday."