Heat the oil in a large pan. Add the chopped onion and carrots and cook over low heat, stirring occasionally, for 5 – 10 minutes or until softened. Add a few dashes of salt and pepper while the veggies are cooking down.
While the vegetables are cooking, dice raw bacon into small pieces and add to a separate pan. Cook on medium until bacon pieces get slightly crisp. Set aside and drain on paper towels. Leave remaining grease in pan for the croutons. To make croutons, cut bread into small squares and cook on medium-low in the bacon pan until brown and crisp. Set aside to drain on paper towels.
Add the pumpkin, half of the cooked bacon (about 1 cup), and nutmeg to the carrot and onion mixture, stirring well. Cover and simmer, stirring occasionally, for 5 – 10 minutes.
Pour in the chicken broth, increase the heat to medium, and bring to a boil. Reduce the heat and simmer for at least 15 minutes. Add a few dashes of thyme and red pepper flakes, season to taste with more salt and pepper if needed.
Remove the pan from heat and let cool slightly. Use an immersion blender to blend up the soup until smooth. If you don’t have an immersion blender, transfer the soup to a food processor or blender and blend in batches, then return to the pan and reheat.
Serve soup with the reserved bacon bits and croutons. Soup is excellent with a few sprinkles of goat cheese on top, or sour cream. Toasted Pumpkin Seeds add a nice seasonal flair as well.