The jpeg file format always compresses (even on the highest quality settings). It works by first separating luminance and chrominance, with chrominance sampled at a lower rate. Then the data is block processed and transformed (discrete cosine transform) then the data is quantized (at varying levels depending on the compression settings) finally it is encoded. However not all those steps are reversible it always loses some information, hence the term lossy compression, but is very efficient at reducing file sizes.
If you do not want such lossy compression, use a different file format which uses lossless (i.e. fully reversible) compression such as png, tiff, psd.
Dave
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