What is inflation? Hint: It’s not the 12% increase in rental-car prices last month

When Chipotle  CMG, 0.39% CEO Brian Niccol shared that the company has increased its menu prices by nearly 4%, some customers thought they knew exactly what to blame for pricier burritos: inflation.

“Let’s be real, Chipotle is the first of many companies that will begin to increase prices,” one person tweeted. “Inflation is real and [it’s] going to be reflected everywhere.”

Chipotle, however, told MarketWatch the price increase had little to do with inflation.

Rental cars and beef cost 12.1% and 6.4% more last month, respectively, compared to April

“The recent price increase is to offset the dollar cost of our wage increase, not to offset commodity inflation,” Erin Wolford, a senior spokesperson at Chipotle, told MarketWatch. Last month, the fast-food chain announced plans to increase wages so employees earn an average of $15 an hour by late June.

But the tweet wasn’t entirely wrong — consumers are paying more for a slew of goods.

Rental cars, airfare and uncooked beef roasts cost 12.1%, 7% and 6.4% more last month, respectively, compared to April, according to the latest monthly report from the Bureau of Labor Statistics that tracks how much Americans are paying for nearly 80,000 different goods and services.

The report, known as the Consumer Price Index, uses all the price data from the individual goods and services to estimate how much more or less Americans can expect to pay for goods across the board.

Data from the most recent CPI report estimates that Americans paid 0.6% more for goods overall compared to the prior month and 5% more compared to last May.
Men's hands with a grater and dollars, the concept of inflation by Marco Verch Professional Photographer is licensed under Attribution 2.0 Generic (CC BY 2.0)