Former Federal Reserve Chairman Alan Greenspan said Wednesday he is "beginning to see the first signs" of inflation in the U.S. economy, speaking in an interview with Bloomberg Television .

"We're seeing it basically in the tightening of the labor markets first, which, as you know, have gotten very tight now. We're beginning finally to see average wages rise, and clearly there's no productivity behind it," Greenspan said

Employment costs grew more quickly than economists estimated in the third quarter this year, an early indicator that more inflation may be coming.

Even as the White House has touted U.S. economic growth, low productivity growth remains a key focus for Greenspan. The past generation of workers have seen only a small gain in real wages. That lagging productivity growth means the economy is "getting into a system now which has no outcome that's in equilibrium other than inflation and no productivity growth," Greenspan told Bloomberg.

Greenspan told CNBC in October that "this is the tightest market, labor market, I've ever seen."

He especially sees rising U.S. debt as a large threat to the economy. While he says the tax cuts passed last year did help the economy, he believes it was "nowhere near enough to offset the actual deficit."

"You can't have a tax cut without finding the revenues elsewhere, or you run into problems," Greenspan told Bloomberg.

Read the full Bloomberg story here.