United looked in good shape at the break when leading through Yohan Cabaye's free-kick but two goals from substitute Adam Le Fondre gave Reading their first top-flight away win since 2008.
Newcastle are now just two points ahead of Reading and firmly entrenched in the relegation battle.
"It was a painful day for Newcastle," he told Sky Sports.
"First half we could not have played better, you could see the extra quality. At that point you'd like to think we'd get away from them, but second half we could not get a grip of the game and, as well as we defended, we gave away two sloppy goals.
"When you're down the bottom things go against you and we lost our way a bit. It was a tough day for us today, we felt we were in a really good place to win today and we couldn't and that is a worry."
The home crowd were furious when Cabaye came off on 73 minutes, but Pardew confirmed it was down to his recent groin injury as this was his first star t for two months.
"We had to take Cabaye off because of an injury, that brought negative reaction from the crowd and that spread around," Pardew said.
"We need some impetus in terms of singings. It needs a little boost, to get everyone to get their heads up.
"We have lost Demba Ba and Cheik Tiote. We have got Cabaye back, but he is just on the first stage of his comeback. We needed him towards the end of the game.
"He said he was struggling with his groin. I did not want to take him off, but when a top player tells you he's injured you listen to him."
Pardew confirmed talks over the future of captain Fabricio Coloccini will take place this week.
"That is something we will sort out this week and hopefully we will in a positive way," he said.
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