Performance
The best known lossless compression methods can compress such data about 2:1 on average. Lossless JPEG compares well with this. Baseline JPEG can typically achieve 10:1 to 20:1compression without visible loss, bringing the effective storage requirement down to 1 to 2 bits/pixel. 30:1 to 50:1 compression is possible with small to moderate defects, while for very-low-quality purposes such as previews or archive indexes, 100:1 compression is quite feasible. An image compressed 100:1 with JPEG takes up the same space as a full-color one-tenth-scale thumbnail image, yet it retains much more detail than such a thumbnail. [1]

Gray-scale images do not compress by such large factors. Because the human eye is much more sensitive to brightness variations than to hue variations, JPEG can compress hue data more heavily than brightness (gray-scale) data. A gray-scale JPEG file is generally only about 10%-25% smaller than a full-color JPEG file of similar visual quality. But the uncompressed gray-scale data is only 8 bits/pixel, or one-third the size of the color data, so the calculated compression ratio is much lower. The threshold of visible loss is often around 5:1 compression for gray-scale images.

JPEG has a hard time with very sharp edges: a row of pure-black pixels adjacent to a row of pure-white pixels, for example. This makes it less useful for text.
JPEG is a useful format for archival storage and transmission of images, but it shouldn’t be used as an intermediate format for sequences of image manipulation steps. The real disadvantage of lossy compression is that if you repeatedly compress and decompress an image, you lose a little quality each time. In general, recompressing an altered image loses more information, hence it's important to minimize the number of generations of JPEG compression between initial and final versions of an image.