Everyone of us who uses the English Language would have used this phrase. We use it with the desire to see the persons we wish upon has divine blessings or when we see a person sneezes. Here is the story as told by Tony Wootton and Gwen Zanzottera in their book, “By Hook or by Crook.”
It was thought at one time that when you sneezed your soul jumped out of your body, and so people said Bless you to ensure your soul was not ensnared by the devil and that it jumped back into your body.
Of course, not many of us believe this anymore, but we still use it when other sneeze. The other usage of this phrase needs no explanation.
Bless you in all circumstances!