I measure my waist around the smallest part of my waist-- it is the easiest spot for me to find, and I know I can be accurate about measuring around the same place each time, that way.
I also measure around my belly button, or "stomach" as I record it. This number fluctuates a lot more because it depends a lot on whether I just ate something, or if it's right in the morning, or how much water I've been drinking, etc. So I don't let this number bother me if it went up as long as my waist went down and the scale went down.
For me, personally, I am 5'7" and I went back and checked my records of my measurements- I lost 4.6 pounds before I lost an inch off my waist (29.5" to 28.5"). So it may take more than a few pounds before you lose an inch off the waist.
Just keep working at it, and you'll reach your goal though! Don't worry about it.