The Gunners took the lead through Martin Odegaard just before half-time, but they failed to kick on after that.
The defeat means Arsenal have now lost back-to-back games and they are sat seventh in the Premier League after 15 games.
“We could not take the ball into the final third. We kept giving the ball away,” said Arteta.
“Sloppy passes, sloppy touches and they are not going to give you that time.
“At Goodison you have to know what you are going to expect. The spaces were there and it was not good enough.
“In the first-half we were very inconsistent with the ball. We had control of the game. We didn’t concede anything apart from the set-piece, but I didn’t like [it].
“No penetration, no threat, totally the contrary to what we try to do and one of the few times that we’ve done it, we scored a goal from Martin.
“We were 1-0 up. Second-half we tried to do more of things, again being very inconsistent in that aspect, creating four big chances - one from Eddie, two from Martin and one at the end from Auba.
“We concede a very sloppy goal, the first one, when you have to manage the game. It’s not enough to win a game.”