"We understood that we might get a few hidings over the course of the season and we've had two on the bounce, said McCarthy. "But I don't worry about how we rebound from it at all.
"The players knew this would be a difficult and the Birmingham game will be different, that's for sure.
"The impetus goes when you're three up but they got another. It was all about damage limitation - they've never conceded four to a newly-promoted side, or I doubt it, so it was just about not getting beat six or seven.
"But we might as well realise that we are in a relegation dogfight, no question. With all the games we have left, that's the situation we're in, we can't hide away from it and say 'we are doing okay'.
"We look like a team that can get relegated. If you don't understand the difference between that and just being in the relegation zone, then I don't know whether I should explain it.
"Everton were down in the bottom three for a while but they didn't look like a team that was going to get relegated to me.
"Let us understand where we are, we are in the bottom three."
McCarthy refused to say whether he would be given any money to strengthen his squad in the January transfer window.
"I don't discuss money," he added.
Wolves 5/4, Draw 9/4, Birmingham 9/4