If you were to describe Elizabeth Strout’s latest novel – and her work more generally – to a newcomer, you might struggle to convey its immense rewards. Here, an irascible, obstinate woman of 90 trades stories with a 66-year-old writer who has recently settled, along with her ex-husband, in the small Maine town of Crosby. Nearly always concerning locals past and present, the tales meander, hopping between generations, and both teller and listener often puzzle and disagree over what meaning they might yield, if any. As Olive Kitteridge and Lucy Barton feel their way towards a tentative friendship, even the town’s more lurid events – an elderly woman goes missing and her oddball son is suspected of her murder – are absorbed into the gentle pace of their conversations.

And yet, Strout is a magician. From what might seem cussedly bathetic, deliberately underplayed, she produces rabbit after rabbit; moments of such sadness or illumination that the reader may feel momentarily winded before being compelled to continue. Sometimes it is a matter of the compression of backstory: Gloria Beach, the 86-year-old whose body is discovered in a quarry pool in the middle of the novel, has led a life of such suppressed trauma that it seems almost indecent when its details are quickly recounted. And yet this is what we do: the abused child who married another abuser becomes the spiteful dinner lady nicknamed “Bitch Ball”, her bewildered son hypothetically exonerated should he be found to have murdered her. Whole histories, and what Olive and Lucy consistently refer to as “unrecorded lives”, are absorbed into the contours and dispositions of the present moment.

The novel gains much of its power through gaps and silences. There is plenty of white space between chapters that are often short and fragmented; occasionally, Strout gives only a piece of punctuation – a single, bracketed exclamation mark, for example – to indicate the irony or contradiction of a character’s situation. Unusually in her work, she gives the narrative voice a tiny walk-on part with a smattering of “As we have said” or “We might want to take a moment” asides, as if to remind us that we are in a kaleidoscopic story that will shift through time and perspective.

It is also very funny. Olive Kitteridge – who, like Lucy, is the central figure of several books in her own right – is reinforced as one of Strout’s great creations. Peppery, impatient, an enemy to squirrels and unpunctuality, prone to sizing up everyone she meets and finding many of them wanting (“some high muckety-muck doctor”, “a snotwot”), she retains the core of empathy and kindness that she spends so much energy concealing. Now in a retirement community, her friendship with Isabelle Goodrow, who has been transferred “across the bridge” to the nursing wing, is lightly sketched but devastatingly elegiac. As a counterpoint, Lucy’s faint otherworldliness allows us to side with Olive, who finds it both bizarre and irritating, but also to recognise when she hits on the truth. “Some people on this Earth eat other people’s sins,” she says in response to one of Olive’s stories, and she extends the diagnosis to Bob Burgess, the novel’s other main character, whose life has been shaped by his belief that, as a child, he was responsible for his father’s death.

“None of us are on sturdy soil,” Lucy tells Bob on one of their customary walks. “We just tell ourselves we are.” In itself, this is not an especially profound observation, but it’s the breadth and quality of Strout’s attention that makes it so. Her gaze rests not only on her principals but on the figures who stroll its perimeters: the residents of broken-down houses, porches strewn with bicycle tyres and plastic toys, the bereaved spouses and the unloved children, the fentanyl addicts and visitors to food pantries. Bob, who takes groceries to old, dotty Mrs Hasselbeck, is called on to felt-tip her underwear so that she knows back from front – he swallows hard and does it. And fiction that might seem to exude an air of cosiness demonstrates itself to be the exact opposite.