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Your problem may be the result of rasterisation of a vector object (the text) when you merged it with the image layer. Vector graphics are made up geometrical elements such as points, lines, curves, and polygons, which are derived from mathematical equations and are unaffected by changes in magnification and resolution because vector objects are interpreted as a whole which can be scaled and adjusted predictably. Raster graphics, on the other hand, is comprised of a multitude of pixels, each individually mapped with it’s own colour and/or transparency value. The resolution you are working in as well as the jpeg format (does not support/preserve embedded text and vector objects). Unless it specifically has to be a jpeg, you may want to consider using a image format that will preserve vector and text (will not rasterise these)such as .pdf.
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