(Edit: I just realized that DSVA already mentioned this as a comment to an answer; in any case I think it deserved to be made an answer)
Your question is important, because interpreting this editorial decision can shape your choice of resubmission, as mentioned in Nicole Ruggiano's answer.
It is therefore important to realize that "reject with invitation to resubmit" currently may really mean "major revision needed".
Of course, one wonders why an editor would not tell "major revision" if it is what he or she means; the point is that major revisions may take a long time to be implemented, so that the paper could end up being accepted, and published, very long after submission. But average time from submission to acceptance is now used by some authors when choosing where to submit, so to attract more submissions journals have an interest on making this number as small as possible. One way of doing that with little cost is to reject and invite to resubmit instead of asking for a major revision before reassessment: the official submission date will then be the second submission, not the first.
I think such a practice is unethical, of course, but that does not make it less real and one needs to be aware of it.