United constantly exposed its city rival on the counter at the Etihad Stadium, helping the Red Devils move into a two-goal lead inside the opening half-hour.
Marcus Rashford won and then converted a penalty before Anthony Martial fired in a second after being picked out by Daniel James.
Guardiola talked up United's counter-attacking threat on the eve of the match, but the City manager has admitted his side ultimately had no answer to the trio.
"I like how my team played," Guardiola said. "We conceded a little bit more space - not more than usual, but more than last year against United.
"We knew about the pace they have, with James, Martial and Rashford, but sometimes it is not possible to control it."
Nicolas Otamendi pulled a goal back for City five minutes from the end, but there was to be no comeback for the reigning champion as its title hopes were dealt another blow.
"In general, we did what we like," Guardiola said. "We arrived in the final third many, many, many, many times.
"Unfortunately, we couldn't finish a little bit more, but I like to watch my team. I know nobody agrees but I like it."
Third-place City is now 14 points adrift of leader Liverpool, which beat Bournemouth 3-0, and travels to Arsenal next.
The home loss means Guardiola has the lowest points tally after 16 games of a season in his senior coaching career, but he is not surprised by the drop-off in form since last term.
"Sometimes it happens," he said. "Sometimes you don't win and the others are better and you lose. Normal is not winning the league always, sometimes you lose.
"It is important not to give up and try to do what we do as a team. All the games we play a season we play the game I want my team to play.
"After that, the counter-attacks, the final third, when we struggle in some departments okay, it's part of the process. Maybe next season we will be better."