Question: What have you been doing for the past....

The best response, to me, is to answer the question. What have you been doing for seven months? In my opinion it is important to show to a hiring manager that--in addition to looking for work--you demonstrate a diligent, disciplined approach to developing your skills and abilities in your field.

There are many good people out looking for work. Some have been looking for work even longer. There is no shame in that.

You indicate in a previous post that your field is tied (somewhat) to seasonal activity. In a previous life I was a university professor--summers "off" meant constant reading of journals in my academic discipline, supervising student research projects, occasionally teaching summer courses, doing consulting projects, etc.

In like fashion, are you keeping up in your field? Are you reading professional trade journals in your occupational field? Catching up on Manager-Tools casts? Rehearsing interview questions such as "Tell me about yourself"

In addition to TL's comments, (or maybe the same, depending on your view), they want to see that you have some sort of plan. 

Not the world's greatest plan.  But a plan to do a couple of things.  Keep current, develop yourself, focus on where you want to be.  I have been underemployed to 2+ years and I emphasize how I have used this time to upgrade my marketing, finance, managerial and social media toolkits.

*RNTT

As well as all the suggestions above, I'd also consider mentioning one or two non-work related things that you've enjoyed doing. For example, perhaps you've been travelling, doing some home improvements, taking up a new hobby, or something along those lines. 

I've asked this sort of question once or twice in the past, partly as a way of verifying what's on the resume, and partly as a 'soft' conversational question. I seem to remember being more impressed where someone has used their time in some constructive way, but that the actual details didn't matter so much. Building up job related skills is a great answer. If you actually don't have much to say there, and if you've been doing other reasonably constructive things, I would be open about those, too. 

Good luck,

S.

A key thing that the interviewer is looking for is that you have plans, that you undertake projects intentionally.   So it's not just a laundry list of what you've done, but your answer should describe a pattern of deliberate self-improvement.   Something like this: 

"My activities have been focused on three things:  my job search, improving my skills, and helping the community.  Let me expand on each of those briefly....[talk very briefly about how you organized your job search]...I needed to improve my skills in managing people and I wanted to earn my certification in ...[how you did that]....  I also had an extra hour a day which I could give back to my community, so I ...."  

Keep it to three or four minutes, and your answer will impress!  

John Hack

I've just gone through the hiring process for a couple of open positions and some of the candidates were out of work or working temp positions.  The answers that I was impressed by were the ones that stayed focussed on the connection to developing their career and work interests, i.e. involvement in professional organizations, etc.  I was not particularly impressed by hobbies, travel, etc., unless they could draw a connection to the position I was interviewing for.