Manchester United moved three points clear at the top of the league table on Tuesday night when they won 1-0 at Burnley.
Paul Pogba was the difference-maker with a deflected goal in the 71st minute and Manchester United will now go to Anfield to face Liverpool on Sunday top of the league table.
Shearer stressed that Manchester United look a vastly improved side from the one that lost 6-1 at home to Tottenham in the initial weeks of the season and they look a more organised team.
The former striker also insisted that there is a real spirit of camaraderie and togetherness in the team and they look willing to work hard for each other on the pitch.
He believes Manchester United truly deserve to be top of the pile at this stage of the season.
Shearer said on Premier League TV post match: “They are the in-form team.
“Man City are playing well, getting the right results and scoring goals.
“But when you look at Man United, the improvement from them certainly defensively. When you look at where they were against Tottenham at home and where they are now.
“There is togetherness, the willingness to fight and scrap for each other, they certainly look more organised than they have been for a while and they look a team.
“They look a team that want to work and scrap for each other and that’s what they deserve.
“They deserve to be where they are.”
Manchester United have not lost a league game away from home since January last year when they suffered a defeat to Liverpool at Anfield.
They will face the same opponents on Merseyside on Sunday.