Overdrive Help

I have a 89 Cherokee with the inline 6 and AW4. The problem is that there is no lockup of the torque converter but other than that everything is working just fine. Anybody have any idea what this could be?

Also, I only achieve at best 14mpg and this was the same with my other 89 that was lifted. This one is completely stock. Anybody know what gives?

I would check the TPS, solenoids in the transmission, and the TCU in that order. I believe it is the #3 solenoid. Do a search and you will find loads on all three and your symptoms. Not uncommon.
BSD

The TVS cable may be set wrong.

Adjust that torrque converter release switch on the brake pedal rod. Sometimes it backs out and the TC won't lock becuase it thinks you are appling the brakes.