lol, as a Jew, I really cant see what the problem is.. racist? Judaism is not a race.. it is a religion. We here in Israel we have black Jews , north African Sephardic Jews, Indian Jews, European Jews, Russian Jews , Argentinean Jews, Iraqi Jews Iranian Jews , Dutch Jews American Jews.... AND beautiful mixtures of them all. Jews who came form 100 different countries with all kinds of different looks... we are Jews because we practice the Jewish religion and are of the Jewish faith.
Nazi Racial Ideology tried to twist the religion into a race, with a unique different blood and physical characteristics. but they couldn't.
So I would not be even remotely offended by the word Jew .... and if your friend is... I think he may have the problem of being prejudiced, if he thinks calling me a Jew is a bad name or a slur.. its just a fact of who I am.. and rather proud o be so.
So poo on them.. stick to tiddly winks with them next time! lol