The defeat left them eight points adrift of the leaders and dumped them down to third place following Ipswich's win over Rotherham.
Jewell's men now have just five games to get themselves back into the automatic frame, starting at Cardiff City on Saturday.
"I think we are playing for second place now," conceded Jewell following the second home defeat in four days.
"You never give up but I can't see Sunderland falling away because they are a really decent side.
"We have to hold on and it is a race for second I feel. Every game is important to us and we don't want a repeat of what happened to us last season.
"It has been a bad few days for us but we have five games left and 15 points to play for, which is a lot.
"If we get all those 15 we will be all right.
"Things are not in our hands for the first time in a long time and it's now up to us to do our best and see what happens.
"But it's no good relying on other teams if you don't perform yourselves."
A third-minute goal from Marcus Stewart settled last night's clash, a strike
surrounded by controversy.
There were claims the ball had gone out of play in the build-up while Latics had a strong shout for offside.
Referee Andre Marriner and his two assistants were booed off the pitch by the home fans at both half-time and full-time.
And the absence of a flag for offside disappointed Jewell.
He said: "I actually thought it was out of play to begin with but I have seen it on video and I don't think it was.
"But Stewart was half a yard at least offside.
"Saying that, we had 87 minutes to do a lot better, only to huff and puff and not really threaten their goal.
"The goal was a kick in the teeth because we had a great chance before that which we didn't take.
"Less than a minute later, we were 1-0 down to a goal which we thought shouldn't have stood.
"I can't really make excuses, though, because we didn't perform and Sunderland were the better team.
"They have the best away record in the division, are on a roll, and must feel almost invincible at the minute.
"Good luck to them, they won the battles all over the park.
"It wasn't a classic game by any stretch of the imagination.
"Sunderland defended comfortably and we ended up just knocking the ball long and hoping more than anything.
"We got anxious, tried to force the ball and we didn't move them round enough."
Jewell was disappointed Latics didn't reward the huge crowd with a better display – the attendance was 76 better than the previous record against West Ham on the final day of last season.
Lee McCulloch missed the game after suffering a back spasm but should be fit to play at Cardiff.
His place on the left wing went to Alan Mahon but the Irishman was replaced at the interval by Brett Ormerod following a below-par display.