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.
Aye, couldn't agree more, and to that affect it has been said that USD has lost 50%*needs citations ;p* of its value over the past 3 years.