Clarke's men were bundled out for just 151 after he won the toss in a Pool A clash against fellow tournament co-hosts New Zealand at Auckland's Eden Park on Saturday, with left-arm swing bowler Trent Boult taking a career-best five for 27. - 'Fantastic attack' - "So recovery is going to be the key."
"We were extremely poor, there is no doubt about that," said Clarke. "I think credit needs to go to New Zealand bowlers. They bowled really well.
"They swung the ball nicely and bowled good areas, but our shot selection was very poor, and I thought our defence more than anything else was an area that was a lot poorer than we would have liked.
"I think moving forward the balls are going to swing and we've got work to do with the bat. That's for sure."
Australia were well-placed at 80 for one, with opener David Warner (34) and Shane Watson (23) adding 50 for the second wicket before a rapid collapse saw eight wickets lost for just 26 runs.
It was only because of a last-wicket stand of 45 between Brad Haddin (43) and Pat Cummins (seven not out) that Australia avoided their lowest World Cup total of 129, against India at Chelmsford in 1983.
That Australia almost pulled off a stunning win was down to a brilliant bowling effort led by left-arm paceman Mitchell Starc's career-best six for 28.
Starc took two wickets in as many balls before last man Boult blocked the final two deliveries of the 23rd over. The first ball of the next over saw Kane Williamson (45 not out) strike the winning six off paceman Pat Cummins.
Clarke insisted Australia hadn't given up hope of victory after they were dismissed inside 33 overs.
"I made it clear to the boys that I thought we had enough runs, and I think you have to do that certainly as captain of the team," he said. "You have to back your bowlers.
"We've got a fantastic attack. All the guys have individual skill and talent, there is no doubt about it. And I think you've seen a good glimpse of that with the way Starcy bowled on Saturday.
"So the faith was there, there was no doubt about it. And we just had to execute. I think we did that."
"Starc to me was a standout today. That individual performance was as good as you'll see in any form of the game."
Clarke, who holed out off Boult in his first international game since December last year following a hamstring injury, added: "I'd like some more runs. I'm no different from the other top six batters. We were disappointing today, and my shot selection was poor."
The win moved New Zealand into the quarter-finals with four wins in as many games, while Australia have three points in three, after Saturday's match followed a 111-run win over England and a wash-out with Bangladesh.
Clarke said the lengthy flights involved threatened to be the biggest challenge facing Australia in the remainder of their group campaign. "The toughest part of the next few games for us is the flying time, I think," he said.
"We've got eight-and-a-half hours travel time to Perth tomorrow," said Clarke, whose team next play Afghanistan on March 4. "Then another five hours back to Sydney," said Clarke of the match against Sri Lanka on March 8.
Clarke's men were bundled out for just 151 after he won the toss in a Pool A clash against fellow tournament co-hosts New Zealand at Auckland's Eden Park on Saturday, with left-arm swing bowler Trent Boult taking a career-best five for 27.
- 'Fantastic attack' -
"So recovery is going to be the key."