Pearce felt that was a bitter blow for City having barely put a foot wrong all game.
"I'm bitterly disappointed that we have lost again, the organisation and the way we played deserved something out of the game," he said.
"But if you give Steven Gerrard the ball 25 yards out from goal with a written invitation on it, you are asking for trouble. That was the difference between the two sides.
"At the time we were looking to come back into the game, with their frustration showing a bit. The endeavour we showed deserved something, and the manner in which Liverpool won the game hurts me even more.
"The whole dressing room is bitterly disappointed because the work rate and effort to win the game was there, but if you play against the top boys and make mistakes, you get punished. We made one mistake, and we got punished for it."
Nedum Onuoha came in for his first start of the season at right-back, with new England international Micah Richards moving into midfield. Didi Hamann was denied the chance to face his former club as he stayed on the bench.
"I wanted Micah in there to give us some more legs in midfield," said Pearce.
"Nedum has shown me over the last 2 or 3 weeks that he has played well and I wanted them both in there."