I'm struggling to understand the following inflation numbers for South Africa given here: http://www.tradingeconomics.com/south-africa/inflation-cpi
Year Month Inflation 2015 Jun 4.7 2015 Jul 5 2015 Aug 4.6 2015 Sep 4.6 2015 Oct 4.7 2015 Nov 4.8 2015 Dec 5.2 2016 Jan 6.2 2016 Feb 7 2016 Mrt 6.3 2016 Apr 6.2 2016 May 6.1
I thought that inflation for this year can roughly be seen as (buying power of my dollar a year ago)/(buying power of my dollar today), and I also thought this would correlate with what services and items cost. For instance, I thought that a chocolate bar's price would roughly follow inflation (i.e. chocolate prices would roughly go up by 5% yearly if inflation is ~5% for those years).
So at first these figures confused me a little, since it surely can't be the "monthly increase"; my buying power couldn't have drop by 4.7% to 7% each month. So I then thought it is a yearly rate given monthly, that this rate should either be divided by 12 to reflect the actual decrease for the month---or be calculates as (wanted rate) = ((given rate)+1)^(1/12)-1 if I must take compounding into account.
But my friend then told me that with the 2015 August and 2015 September rate being both at 4.6 would mean that the prices would most likely not have changed. I don't understand this. What am I missing? Is a larger inflation number for a month not a reflection of how much my money's buying power is falling in that month?