Time is the goon in this sparkling novel of change and decay that ranges from the late 70s to the near future. Ageing, loss and compromise are explored in all their universal predictability and piercing individuality: we're all getting a visit from the goon squad.

Appropriately enough, Jennifer Egan has set her novel in a milieu predicated both on nostalgia and the race for the next big thing: the music business. In punk-era San Francisco, teenagers in mohicans and safety pins take over from the greying hippies begging on street corners; by the 2020s, in a postwar baby boom, the quest for the youth market and the ubiquity of mobile technology reaches its logical conclusion, with all pop songs directed at toddlers ("pointers", so called for the ease with which they download songs on their handsets). The intervening years have seen the digitisation of music and the mainstreaming of rebellion, and now the youth of tomorrow eschew piercings and tattoos. "And who could blame them, after watching three generations of flaccid tattoos droop like moth-eaten upholstery over poorly stuffed biceps and saggy asses?"

Egan's sprawling cast of loosely linked characters and episodic narrators are a vibrant collection of dropouts, survivors and misfits; they include record producer Bennie Salazar, Sasha, his kleptomaniac assistant, and various friends and family members. As we dip into their lives at critical points, not always in chronological order, the web of connection becomes ever more complex: Bennie's wife's brother assaults a movie star he's meant to be interviewing, who later works with a PR whose daughter ends up running a viral media campaign for Bennie . . . Mines laid early on in the narrative detonate after hundreds of pages: the book demands, and repays, a second reading.

When we first meet Bennie he's already inured to his success, yearning nostalgically for the muddy authenticity of analogue recordings (digitisation is "an aesthetic holocaust! Bennie knew better than to say this stuff aloud") and sprinkling flakes of gold into his coffee in an attempt to get his mojo back, a habit more ostentatiously expensive than coke. But the "deep thrill of the old songs" lies, of course, in their power to return our youth to us: the Dead Kennedys are his aural equivalent of Proust's madeleine.

The next section jumps back in time to the era of Bennie's teenage punk band, beautifully sketching their adolescent combination of posturing and sincerity, as well as developing currents of mismatched desire among a group of friends who've "done everything together since fourth grade: hopscotch, jump rope, charm bracelets, buried treasure, Harriet the Spying, blood sisters, crank calls, pot, coke, Quaaludes".

That list conveys a keen, sweet flavour of time passing, as does the sad wonder with which these baby-faced punks regard their younger siblings, still playing in the lost kingdom of childhood. Throughout the novel, characters strain to apprehend time and its effects on the flux of personality  that desire, as Sasha puts it, to be able to say "I'm changing I'm changing I'm changing: I've changed!" Egan's chronologically jumbled structure is the perfect vehicle to express this, shuttling the reader between prophecy and hindsight. "So this is it  what cost me all that time," says one narrator, reunited with the music mogul, now on his deathbed, who seduced her as a teenager and derailed her future plans. "A man who turned out to be old, a house that turned out to be empty." What looked at 17 like the beginning of her life story became its dominant narrative.

The desire to step outside time is symbolised in Sasha's autistic son's obsession with pauses in old songs  Bowie's "Young Americans", the Four Tops' "Bernadette", songs that are themselves pockets of frozen time. This section of the book, set in the future, is presented as a series of PowerPoint-style slides produced by a young girl for whom writing a diary in continuous narrative would be utterly old fashioned. Egan conjures a mood of poignant immediacy with these discrete, disconnected statements, as she does with the text messages that stud the final section.

Such formal playfulness and variety is found throughout the book  a celebrity interview peppered with subversive footnotes; episodes narrated in the second person or first person plural, to conjure the disassociated mindset of a depressed college student or the camaraderie of the teenage band  but always used to increase its emotional power.

This is an incredibly affecting novel, sad, funny and wise, which should make Jennifer Egan's name in the UK and is already picking up prizes. As well as being longlisted for the Orange prize, it recently won the US National Book Critics Circle fiction award, an event widely reported in terms of the surprising news that Jonathan Franzen's Freedom hadn't won.

In fact, the two books have a lot in common: poignantly comic social novels told from multiple viewpoints which set up a nice tension between authorial omniscience  Egan often steps back to make casual reference to future events  and the doubts and confusion of their cast. Egan even includes the Franzenesque trope of sending a restless character on an unlikely money-making foray abroad, flexing free-market muscles in an exotic environment where corruption and danger are rather sharper threats than in middle-class America.

While Franzen's last two novels ventured to Lithuania and Paraguay, Egan dispatches a down-on-her-luck publicist to Africa on a mission to improve the global standing of a genocidal dictator by linking him romantically to an American celebrity. (Imagine Charles Taylor doing a Hello! spread with Britney Spears.) It works as a highly coloured satire on PR ("Dolly had worked with shitheads before, God knew") but, like Franzen's similarly OTT interludes, jars with the rest of the book, in which daily life is colourful enough already. A Visit from the Goon Squad is a novel to relish, and Egan is a writer in her prime.

The title of Jennifer Egan's new novel may make it sound more like an episode of Scooby-Doo than an exceptional rendering of contemporary America, but don't be fooled. The book received rave reviews when it was published in the US last year, and for good reason; it has since been named a finalist for several prestigious American prizes. Egan has said that the novel was inspired by two sources: Proust's À la Recherche du Temps Perdu, and HBO's The Sopranos. That shouldn't make sense but it does: Goon Squad is a book about memory and kinship, time and narrative, continuity and disconnection, in which relationships shift and recombine kaleidoscopically. It is neither a novel nor a collection of short stories, but something in between: a series of chapters featuring interlocking characters at different points in their lives, whose individual voices combine to a create a symphonic work that uses its interconnected form to explore ideas about human interconnectedness. This is a difficult book to summarise, but a delight to read, gradually distilling a medley out of its polyphonic, sometimes deliberately cacophonous voices.

The "goon squad" of the title is not itself a reference to The Sopranos: there are no mobsters here. It is one character's name for time: "Time's a goon, right? You gonna let that goon push you around?" Everyone in the book is pushed around by time, circumstance and, occasionally, the ones they love, as Egan reveals with great elegance and economy the wobbly arcs of her characters' lives, their painful pasts and future disappointments. Characters who are marginal in one chapter become the focus of the next; the narrative alternates not only between first-person and third-person accounts, but  perhaps just because she can  Egan throws in a virtuosic second-person story as well, in which a suicidal young man tells his tale to a colloquial "you". She also shifts dramatically across times and places: punk teenagers in 1970s San Francisco become disillusioned adults in the suburbs of 1990s New York; their children grow up in an imagined, slightly dystopic future in the California desert, or attend a legendary concert at "The Footprint", where the Twin Towers used to be, sometime in the 2020s.

The stories circle magnetically around a few characters who recur a bit more frequently than others, and broadly around the American music scene: Lou, a coke-snorting, teenage-girl-seducing music producer in the 1970s, becomes the mentor of an untalented young bass player, Bennie, who becomes a music producer himself, who hires a young woman, Sasha, who has a problem with kleptomania, who sleeps with a young man, Alex, who much later ends up hired by Bennie to engineer the comeback of Bennie's high-school friend Scott, who went off the rails as an adult and ended up one day in Bennie's office with a fish he'd caught in the East River, where Sasha's best friend and boyfriend in college had once gone for an early morning swim with tragic consequences. Bennie's wife works for a publicist named Dolly whose daughter, Lulu, will end up working with Alex; Bennie's wife's brother is a journalist who is arrested for the attempted rape of an actress named Kitty Jackson who has her own fall from grace and is later hired by Dolly to enable the public rehabilitation of a genocidal Latin American dictator.

Each chapter has its own distinct voice and mood, modulating from satire to farce, from melancholy to tragedy. I've never found a description of attempted rape funny before, but when Jules Jones writes (from prison) his account of his assault on Kitty Jackson during an interview, it becomes an uproarious parody of David Foster Wallace that owes more than a little to Nabokov as well, as Jules describes finding himself with "one hand covering Kitty's mouth and doing its best to anchor her rather spirited head, the other fumbling with my zipper, which I'm having some trouble depressing, possibly because of the writhing motions of my subject beneath me." Kitty sprays him with Mace, stabs him in the leg with a Swiss army knife, and runs away. "I think I'd have to call that the end of our lunch," Jules remarks.

If it comes as a surprise that an attempted rape can be hilarious, it is an even greater surprise that a PowerPoint presentation can be moving. Goon Squad becomes more fragmented, and more formally experimental, as it progresses: the penultimate chapter is written entirely as the PowerPoint slide diary of Sasha's teenage daughter Alison, whose brother is obsessed with pauses in rock songs. Those pauses, like the spaces between PowerPoint slides, become a metaphor for the gaps between what we mean and what we say, or the apparently unbridgeable distance between family members. The trick feels appropriate in a book preoccupied throughout by the effects of technology on our lives and culture, from the consequences for music of the digital revolution (as Bennie observes, digital production has transformed not only the industry of music but its sound as well) to the way in which technology is transforming our language. Egan's Orwellian final chapter imagines a future in which English has decomposed into radical text-speak: "if thr r children, thr mst b a fUtr, rt?"

Egan has said that the organising principle of A Visit from the Goon Squad is discontinuity; this may be true, but the reason the book works so well is because of the continuities she has also created: her atomised people collide, scatter and recombine in patterns that are less chaotic than they appear. Egan's characters, and the America they inhabit, are winding entropically down. It's a kind of meditation on the butterfly effect, in which recurrence becomes the measure of the chaos of our lives, the novel reimagined as a series of chain reactions. But Egan's vision of history and time is also decidedly, and perhaps reassuringly, cyclical: the impacts these characters have upon each other are engineered not by coincidence but by connectedness itself, as the people we bump against and bang into become the story of our lives.

Sarah Churchwell is a senior lecturer in American literature and culture at the University of East Anglia