City drew 3-3 with Burnley after having battled back from a two-goal deficit to lead with three minutes remaining.
Tottenham Hotspur moved back into the top four, above City, with a 2-0 home defeat of Sunderland after two consecutive losses while Aston Villa climbed to fifth with a 5-1 hammering of Bolton Wanderers at Villa Park.
Portsmouth remain bottom of the table after losing 3-1 at fellow strugglers Blackburn Rovers.
Arsenal took their goal tally to 36 in 11 league games with captain Cesc Fabregas again magnificent for the Gunners as he scored his ninth goal of the season. Arsenal's first two goals were scored by Wolves players.
"Overall it was a good performance," Wenger told the BBC. "They made a strong start - but once we got ahead, we controlled it.
"Our belief is there, we want to give our best in every game. We have great potential and we can go from strength to strength."
Wolves, who dropped into the bottom three, started well but own goals by Ronald Zubar and Jody Craddock scuppered any hopes of a first win over Arsenal since 1979.
Fabregas finished off a flowing move to make the second half academic and Andrei Arshavin rifled in a shot to make it 4-0 before Craddock scored a late consolation.
Manchester City looked to have sealed the points when goals from Shaun Wright-Phillips, Kolo Toure and Craig Bellamy wiped out Burnley's 2-0 lead but Kevin McDonald struck late to earn the visitors their first away point this season.
"It's fair to say we were disappointed with our first half performance," City manager Mark Hughes, who spent nearly 100 million pounds in pre-season, told Sky Sports.
"We put in a huge effort to get our noses in front and we should have seen the game out. There are things we need to look and things we need to address."
City, who last won a league game in September, fell to sixth on 20 points, Villa have 21 while Tottenham are on 22. Arsenal have 25, the same as champions Manchester United but have a much superior goal difference.
United face leaders Chelsea at Stamford Bridge on Sunday.
Sunderland could count themselves unlucky to lose at Tottenham, dominating the game for long periods.
Robbie Keane gave Tottenham and early lead but were hanging on to that slender advantage when their former striker Darren Bent was brought down by goalkeeper Heurelho Gomes to earn a penalty, only to have it saved by the Brazilian who was fortunate to still be on the pitch.
Sunderland manager Steve Bruce bemoaned his side's luck.
"Anybody who witnessed that today will know that we should have got something," he told Sky. "We were terrific.
"In my opinion Gomes should have been sent off because he denied a clear goalscoring opportunity. That was the turning point. We missed the penalty and they should be down to 10."
Tom Huddlestone wrap
