Just when we thought the employment situation was beginning to brighten, along came this week’s jobless claim report for the month of March that was at its lowest level in fifteen years. Coming so soon on the heels of a relatively weak increase in non-farm payroll for March (+126,000 jobs, less than half of February’s increase), it creates a bit of dilemma for investors looking for clear direction on the strength of the economy.

For the two figures to be consistent with one another, the implication would be that the current unemployment rate of 5.5% is very close to “full employment,” which in the past has generally been regarded as 3%. If that is in fact the case, then we should begin seeing larger increases in the hourly wage rate. That may already be happening given recent actions by large employers such as Walmart and McDonald’s to voluntarily pay much more than minimum wage to its hourly workers.

A meaningful sized bump in wage growth should raise concerns about a contemporaneous increase in the rate of inflation, which is usually reflected in the yield on the 10-year Treasury Note. But we aren’t seeing that yet, as its yield remains stubbornly below 2%. Also, the price of gold, normally a harbinger of future inflation expectations, continues to trade in a very narrow range around the $1,200/ounce level despite the improving employment picture.

From an investment perspective, it is fair to ask what opportunities may arise as a result of this unusual dynamic. Specifically, if Americans will have more employment income with which to spend while the strong dollar is increasing their purchasing power at the same time, then where is the investment opportunity in all of this? And if we really want to get greedy, we might want to know if there are any asset classes that have gotten beaten up recently that are poised to benefit from the escalating buying power of American consumers.

One such opportunity may be in emerging markets, which have been left behind while the U.S. stock market has doubled in value since bottoming out six years ago. For example, the WisdomTree Emerging Markets Equity Income ETF (NYSE: DEM) currently held in the Personal Finance Fund portfolio has recorded an average annual return of only 0.3% over the past five years, while Fidelity Large Cap Stock fund (FLCSX) from that same portfolio has averaged nearly 15% over the same period of time.

You may be tempted to go with a U.S. large-cap fund based on those track records, but that may prove to be a mistake. With Quantitative Easing coming to end in the United States just as it is being ramped up in many other parts of the world, we may see a reversal in the flow of cash out of U.S. companies and into select foreign stocks that should benefit from the escalating buying power of the American consumer.

To be clear, investing in emerging markets is not for the faint of heart, and is best accomplished via a diversified fund under the direction of a professional money manager. Trying to pick individual stocks from these markets is truly a “hit or miss” proposition. The degree of divergence between the top quartile and bottom quartile is far greater in emerging markets than it is in developed markets like the United States and Europe, so if you pick the wrong stocks then your returns could be considerably less than that of the overall index.

However, when macroeconomic factors are in your favor the returns from emerging markets can be spectacular. From March 31, 2003 thru October 31, 2007 the OppenheimerFunds Developing Markets Fund (ODMAX) increased in value by more than 500% during a period of time that the S&P 500 Index grew by 83%. I’m not suggesting that the next five years will witness the same degree of outperformance from the emerging markets, but I do believe they are ripe for a rally.

Conversely, when emerging markets hit the skids the collapse can be equally breathtaking. That same fund that grew by 500% in less than five years also fell by more than 50% over the next 18 months as the Great Recession swept across the globe. If what we are witnessing now is a systematic reversal of that progression, then it stands to reason that emerging markets should see their fortunes reverse, as well.

As a general rule I don’t advocate having more than 20% of your stock portfolio in emerging markets, but many investors have none at all. With the U.S. stock market near record highs and the strength of the dollar creating a pricing advantage for many overseas producers, now may be the time to begin building a position in emerging market stocks in your portfolio.