The 1-0 reverse at the KC Stadium was their eighth defeat of the season but Larsson says the result will not take all the positivity they gained from the win over Newcastle out of the side.
To make matters worse for Sunderland, Lee Cattermole and Andrea Dossena were sent off and will miss the Manchester City game and Keiren Westwood was concussed and will be assessed before the clash.
Larsson said: "That positivity isn't all going to go away with one game. We're not kidding ourselves, we know where we are in the league.
"If you're asking me if we'll get out of it, no doubt we will."
The midweek win over Southampton in the Capital One Cup will have helped confidence but the clash with City will still be an extremely difficult test.
Sunderland last week