Salah won a penalty but saw his weak effort saved by Kasper Schmeichel in the 16th minute, thereby failing to convert a spot kick for the first time in 16 attempts. His last penalty miss was against Huddersfield in October 2017.
Liverpool ultimately slumped to only its second loss in all competitions this season when substitute Ademola Lookman found space between Joel Matip and Virgil van Dijk and shot inside the near post in the 59th minute.
"There were too many performances below normal level," Klopp said.
"So often these boys give me the opportunity to say, 'Wow, what a game!' Tonight it's, 'Wow!' but in completely the other way."
Liverpool is tied on 41 points with Chelsea, and both are six points behind City. All three teams have played 19 games, with City and Chelsea — at home to Brighton — in action on Thursday (NZ time).
In Southampton, the Saints were able to hold on for a 1-1 draw against Tottenham despite being down to 10-men for more than half of the game.
Tottenham had two goals ruled out in the second half, and now sit sixth on the ladder.
Elsewhere, Crystal Palace disptached a struggling Norwich side 3-0, while West Ham beat Watford 4-1.
