Humidifiers and Dehumidifiers - Honeywell HE365 Humidifier, Odd Problem

The unit seems to be installed correctly and runs as it should. However, the humidity in the house has not increased. The house is small and not drafty. Considering the size of the house and the output of the humidifier it should increase.

This concern made me start looking at the function of the humidifier. I noticed a large amount of water seems to be making it through the humidifier. About a glass of water every 3 minutes. This made me look closely at the air flow. I noticed the humidifier pulls air into the humidifier then recirculates it via vents on the sides of the humidifier. This seems opposite of what it should be.

It seems to me the humidifier should pull supply air into the side vents then speed up the air flow with the fan and then humidify the air and inject it back into the supply. Is my thinking off base here or is this humidifier running backwards? Could it be wired backwards? I do not see how or what else would cause no increase in humidity.

Thanks for any help.

Is the furnace blower on with the humidifier?
I think this is one that dont use a by pass pipe on it. That helps a lotto get humidity into the home.

ED ;)

Yes, the blower is on while the humidifier is on. This is also a powered model. Another person suggested I connect the water source to the warm side. He said this will help the water evaporate. He also said the flow of air is correct. He then suggested to let it run with the furnace blower only for a few days to get the house humidified. However, after 5 days of it constantly running the humidity level went to 55%. I turned it off so it only runs with when the heat is on and the level dropped to 40% in about a day and will not come back up.