I have often said that hatred starts as ignorance. I DO think political correctness has gotten out of hand, but on a personal level understanding what you're saying and to whom it is being said matters.
I'm sure he's a fine young man, but with "young" being the operative word, he's likely pretty susceptible to influence by others. Maybe his fragile state and need to feel acceptance is there too. So he emulates the others to be accepted into their circle.
I'd say talk to your manager first, and see if he is willing to say something. Tough situation, you don't want to put the kid on the spot or deeply accuse him, but it sounds like he needs to hear something about his behavior before it gets worse and maybe turns into TRUE hatred, not just a joke.
My 2 cents