A club record 17th consecutive home victory for the treble winners was thoroughly deserved despite their exertions in lifting the UEFA Super Cup in midweek.
Newcastle's 5-1 thrashing of Aston Villa last weekend had raised hopes on Tyneside they could be the pick of the challengers to City's crown as English champions.
But on this evidence, Pep Guardiola's men will take some stopping in their quest to become the first side to ever win four consecutive English top-flight titles.
Guardiola was furious at the Premier League for scheduling the game just three days after his side were forced to penalties to beat Sevilla under baking heat in Athens.
City's squad has also been stretched early on in the campaign by the absence of Bernardo Silva and John Stones, while Kevin De Bruyne will be out for up to four months with a hamstring injury.
But dreams the Magpies could pose a challenge for their frist top-flight league title in 97 years were dampened by City's dominance before tiredness crept in late on.
The visitors were happy to surrender possession before the break, but it took a moment of magic for City to find a way through.
Alvarez could be one of the benefactors of De Bruyne's lengthy lay-off.
The Argentine scored 17 goals in his debut season in Manchester despite having to play largely second fiddle to Erling Haaland.
Guardiola may now be forced to pair Alvarez with the Norwegian more often and he showed what he is capable of with a stunning finish into the top corner from Phil Foden's pass on 31 minutes.
Haaland was not as accurate moments later as he dragged a shot inches wide when played in by another Foden through ball.
Newcastle's more attacking intent in the second half only succeeded in leaving City more space to exploit in behind.
However, a rare off night for Haaland in front of goal continued.
Foden stepped up in the absence of De Bruyne and Silva to be the creative spark in the City midfield.
The England international's turn and pass picked out Haaland once more on his favoured left foot only for last season's Golden Boot winner again fail to hit the target.
Haaland went for raw power with his next effort, but was repelled by the legs of Nick Pope as City were made to wait for a second goal to kill the game off.
The European champions were nearly made to pay when Rodri's slack pass presented Callum Wilson with a huge opportunity.
But 90-million-euro ($99 million) defender Josko Gvardiol showed his worth on his home debut to hold up Wilson and Harvey Barnes' shot was comfortably held by Ederson.
Despite his side's fatigue, Guardiola refused to make a single substitution and told one City fan to take his place on the bench when urged to make some changes.
But it all ended in smiles for the home side as City maintained their perfect start to the Premier League season to sit second behind Brighton at the top of the table.
