They don't yet have the words, but your baby understands a lot now
All this time, your baby has been making links between the words they have heard and the objects that they see. Your baby can understand far more of what you say now, even though they can't tell you. It is important to keep up with chatting with your baby, as the more words they have access to will enable more sounds to be spoken.
By now, when you show your baby something that makes them happy, their facial expression will let you know. Usually, this reaction is related to objects of importance to them. By repeating the name of the object, your baby will make stronger links between the object and the word. The most common word that they may understand at this stage will most likely be your name.
One day soon, they'll turn when you say their name
Since birth, your baby has been working out how to sort the flow of language. It is around now that their brain is starting to work out the individual words that have been repeated in your many daily conversations. Your contributions to their language knowledge are beginning to make sense to your baby. This, in turn, allows your baby to engage in active communication. As your baby is for the most part non-verbal, they are starting to use the cues given by you to engage in social interaction.[1]
You may notice one day that you say your baby’s name and they turn to look at you. Their brain has established a link between the word and themselves. Your natural response will be one of delight and pleasure. The positive response your baby receives helps them to understand that their sounds and gestures are receiving attention, and they will be likely to reoccur.[2]
This understanding will grow and grow
This is the very beginning of your baby’s journey into recognising and connecting words to objects. Over the next few months, your baby will begin to understand more names of familiar items and objects in your home and outdoors. You may also start to see excited responses when a family member or friend's name is mentioned. So, keep talking, keep watching and enjoy the journey of watching your baby's understanding bloom in front of your eyes!
References:
[1] Muller. R.T. (2013) Baby Talk: Nonverbal Infant Communication Available at Baby Talk: Nonverbal Infant Communication | Psychology Today
[2] Goldstein M.H, King A.P, West M.J. (2002). Social interaction shapes babbling: Testing parallels between birdsong and speech. Department of Psychology, Franklin & Marshall College and Department of Psychology, Indiana University.