We prove that the arithmetic degree of a graded or local ring A is bounded above by the arithmetic degree of any of its associated graded rings with respect to ideal I in A. In particular, if Spec(A) is equidimensional and has an embedded component (i.e., A has an embedded associated prime ideal), then the normal cone of Spec(A) along V(I) has an embedded component too. This extends a result of W. M. Ruppert about embedded components of the tangent cone.