It means that he is fond of you and is using the term as a pet name instead of using your original name. It may mean that he likes you but only as a good friend and he is also comfortable with you to the point of using the term 'baby.'
It is language used to compare girls to infants. It seems as though it is affectionate, but it really serves to make you less equal to him. Call him 'baby' or 'babe' and see if he likes it after awhile. If things are to be equal, you need new terms of endearment. Your name, perhaps?