What is the "œ" doing here?

Google Ngram does show some use of œconomy around 1750-1800 and there may be more if Google's book scanners have problems with the œ: conomy also appears, often when œconomy was intended .

The Wealth of Nations was published in 1776, so it quite possible that a typesetter put the œ because he thought that may have been what was intended.

The word has had many spellings since its first appearance in the fifteenth century as yconomie. Oeconomie is found in the fifteenth and sixteenth centuries, and oeconomy is found from the fifteenth century onwards. The oe is presumably influenced by the classical Latin oeconomia, which would have had particular appeal in the eighteenth century.