The USD index is an index that is measured against other FIAT currencies. See a problem there? Basically what the index is saying is that the usd decline in value relative to the other currencies. Well if the other currencies also decline in real value (as all fiat currencies do) then the dollar is dropping much more value than just .50%.
If you want to see the real value the dollar is losing then measure it against real things that take effort to produce.
This is a very good point... and how odd that gold is not included in the "basket of currencies?" It's a pretty crappy basket if it doesn't even include the longest-running, most stable money in mankind's history.