Liverpool were held to a draw against West Ham on Monday, a result that leaves just three points between the Reds and Manchester City in second place.
The Citizens can actually temporarily return to the top of the table this week with a win over Everton on Wednesday.
Having drawn each of the club's last two matches, the Reds' lack of depth is beginning to show, Carragher, says as the former defender pointed out the club's decision to loan Nathaniel Clyne and frustrating performances from the likes of Naby Keita, Roberto Firmino and Mohamed Salah.
“I said yesterday Manchester United have a better squad than Liverpool. People may have thought it was a strange thing to say but I think we’re seeing little signs of it,” he said on Sky Sports’ Monday Night Football.
“On the right back situation, Klopp’s made a mistake letting Clyne go. I know there were a couple of injuries but you don’t need to let him go — keep him there.
“At the moment James Milner has played there twice now and watching him you can’t quite believe he played left back so well for so long. He looks like someone completely out of position.
“Keita, who he paid big money for, looked quiet and keeps losing the ball. Firmino doesn’t look himself. Salah we didn’t see anything from tonight.
“I think that’s a worry going forward, not in terms of this pressure in the lead, more that when there’s a few injuries in different positions it doesn’t look like that solid Liverpool side we’ve seen for the last few weeks.”
With City and Tottenham lurking, Liverpool aren't quite as comfortable as they were just a few weeks ago, but Carragher says the title race is far form over as his former club prepares to take on Bournemouth on Saturday.
“I think there were was a lot of frustration out there tonight. I think there were a lot of poor performances. I couldn’t believe how bad Liverpool were tonight, but I also think there needs to be a bit of perspective that Liverpool are still top of the league," he said.
“If Liverpool go one or two points behind City and Tottenham, they’re still in the race for the league.”